Four things you need to know about the DNR’s latest PolyMet decision

PolyMet Mining has made consistent progress through the DNR’s review, which most saw as a signal the project was likely to move ahead despite fervent opposition from environmentalists.

The plan to build a copper-nickel mine in northeastern Minnesota took a leap forward on Thursday, when Minnesota’s Department of Natural Resources approved critical permits for the project.

Coming after an environmental review process that took more than a decade, the decision did not shock anyone who had been following the saga. PolyMet Mining has made consistent progress through the DNR’s review, which most saw as a signal the project was likely to move ahead despite fervent opposition from environmentalists.

While those environmental groups are concerned the project could potentially pollute the ecosystem of Lake Superior and the St. Louis River watershed, supporters say the mine will bring hundreds of jobs to the region while upholding the state’s strict environmental regulations.

But the decision still marks a pivotal moment for the $1 billion project near Hoyt Lakes and could have political ramifications throughout the state just days before elections.

Here are four takeaways from the decision:

1. Environmentalists’ arguments were rebuffed (again)

Environmental groups have so far used two main lines of attack to try and stop the PolyMet project from getting permits.

First, Minnesota’s Center for Environmental Advocacy (MCEA) has argued PolyMet is planning to build a dramatically bigger mine than it has actually proposed. The second is that some disputes over the project — such as questions raised about the safety of its tailings dam intended to store waste — should be subject to review from an administrative law judge.

Both were rejected by the DNR. In a news conference Thursday, DNR Commissioner Tom Landwehr said the agency had done enough research and planning to justify skipping the administrative law judge, and he also tried to downplay concerns of a bait-and-switch. He said any “substantive” change to the current PolyMet project would set up “another environmental review and permitting process not unlike what we have done here in the last 14 years.”

In a statement earlier in the day, Landwehr said “no project in the history of Minnesota has been more thoroughly evaluated.” The DNR also highlighted a financial assurance package from PolyMet to cover clean up costs. It starts at $74 million during construction and scales up to more than $1 billion during the peak of mining, according to the agency’s news release.

PolyMet says its current 6,000-acre open-pit plan would result in roughly 1.2 billion pounds of copper, 170 million pounds of nickel and 6.2 million pounds of cobalt, plus other precious metals, over 20 years. If built, it would be the first non-iron mining operation in the state.

Based on financial information submitted by PolyMet through Canadian disclosure laws, however, the MCEA contends the mining company wants to build a mine at least double in size. Copper-nickel mining has long-term risks for the environment, including the creation of acid that can leach heavy metals into water.

“It is very rare for a regulatory agency to say no to an expansion,” Aaron Klemz, a spokesman for the MCEA, told reporters Thursday. “This is a very common technique for the mining industry — to get their camel’s nose under the tent and then come in with the actual proposal.” Klemz’s organization has a pending lawsuit challenging the decision to not review a larger mine in the Court of Appeals.

2. The timing of the decision might help   or hurt  the DFL

The DNR said its decision to permit the PolyMet mine this week had nothing to do with Tuesday’s election and the timing was purely coincidental. That may be true, but it doesn’t mean the ruling won’t have an effect on voters.

Aaron Brown, a writer and professor in Hibbing who closely follows Iron Range politics, said there’s not likely to be a huge PolyMet ripple but said it could give a “pro jobs talking point” to DFLers like Tim Walz, who is running for governor, and Joe Radinovich, who is a candidate in the 8th Congressional District. In those races, the PolyMet decision could act as a “cover for Democrats who are worried about losing votes to Republicans on this issue,” Brown said.

Mining plays an outsized role in the 8th Congressional District, which encompasses the Iron Range in northeast Minnesota. The GOP has hammered DFLers who oppose another project, the Twin Metals mine plan near the Boundary Waters Canoe Area, and argued the environmental review process for PolyMet took far too long.

That said, both CD8 candidates, Radinovich and Republican Pete Stauber, have backed PolyMet’s mining plan. Brown said people shouldn’t think “the Range is going to come thundering in for Radinovich simply because of this.”

Another group the DNR permits could influence: disaffected environmentalists. Brown said the decision could drive some in the 8th Congressional District to vote for an alternate candidate. Ray “Skip” Sandman has been running with an anti-mining stance in the district. 

Tim Lindberg, an assistant professor of political science at the University of Minnesota Morris, said if Walz comes out strong in support of the PolyMet decision, it could “reinforce the belief among some DFLers in the [Twin] Cities that Walz is too moderate for them.”

Walz has signaled his support for letting the project go through the environmental permitting process. But an email to a spokeswoman about Thursday’s decision was not returned.

3. The politics of the PolyMet project are not the same as those of Twin Metals

The positive reaction to the DNR permits across much of the political spectrum underscores the difference between the PolyMet project and the contentious copper-nickel mining future of Twin Metals near the Boundary Waters Canoe Area.

Some Democrats have worked to throw roadblocks to mining near the BWCA, worried it could harm Minnesota’s most famous natural area. Just one example: former President Barack Obama ordered a study of the impact such a mine might have on Superior National Forest and the BWCA that could have led to a 20-year moratorium on copper-nickel mining in the area. It was ended recently by President Donald Trump’s administration.

Gov. Mark Dayton, Walz and other prominent DFLers have tried to slow or stop minerals exploration in the region, too. (The same goes for U.S. Rep. Erik Paulsen, a Republican.)

On the flip side, Dayton has supported PolyMet outright, while Walz and DFL Sens. Tina Smith and Amy Klobuchar worked to facilitate a land exchange for the PolyMet project in Congress.

“Mining is not only part of the north country’s past, but it’s also part of its future,” Smith said at a debate Thursday with Republican state Sen. Karin Housley. Smith added the PolyMet project “should go forward.”

4. There is an air of inevitability about the project

Kathryn Hoffman, CEO of the MCEA, declared in a statement that the DNR’s decision “does not mean that PolyMet will move forward.”

She’s right. While the DNR approved 11 permits it has control over, PolyMet still needs a bundle of other permits from Minnesota’s Pollution Control Agency, the Army Corps of Engineers and other local permissions. (The MPCA permit decision is expected by the end of the year, according to PolyMet, and the Army Corps will follow after.)

The MCEA’s lawsuits remain pending and more from environmental groups appear likely in the coming months. But Thursday’s decision gives more certainty to PolyMet and its investors, and many supporters are celebrating.

PolyMet said the DNR permits allow them to move forward with “financing and final engineering designs” on the project, and paves the way for them to begin modernizing old LTV Steel Mining Company processing facilities for a new PolyMet mine.

“It is a victory for Iron Range families who have steadfastly supported us and who depend on and will benefit from the hundreds of jobs that construction and operations will create and support for years to come,” PolyMet CEO Jon Cherry said in a news release.

Speaker of the House Kurt Daudt, R-Crown, said in a statement that the DNR permits were “great news for the Iron Range and for all of Minnesota.”

Aaron Brown said his attention is now largely turning to whether the mining project can actually become and stay a profitable venture in an industry that can be volatile.

“I think the bigger issue is that everyone on the range has put their hopes and dreams into this enterprise here — and that it might not deliver the manna from heaven that everybody hopes for even if it opens,” he said.

Comments (7)

  1. Submitted by Mark Voorhees on 11/02/2018 - 12:14 pm.

    My biggest concern is Polymet’s ability to cover the cost of a cleanup. Thus far it’s a company on paper only and with these permits they will be able to seek investor dollars.

    “The DNR also highlighted a financial assurance package from PolyMet to cover clean up costs. It starts at $74 million during construction and scales up to more than $1 billion during the peak of mining, according to the agency’s news release.”

    I would want to know what is in this ‘financial assurance package’! This is the key. What will happen if Polymet doesn’t hold up their ‘assurance’? Can the state shut down the operation? I would love to know what is in this package.

    • Submitted by Frank Phelan on 11/02/2018 - 12:25 pm.

      How about some sort of performance bond? Construction contractors have to have these, so if they go broke before a job is complete, the bonding agency has to pony up to get the job done. If the private market thinks it’s a good risk, that tells us something. On the other hand, if they cannot get this form of private insurance, we should all be skeptical.

    • Submitted by Wilj Flisch on 11/03/2018 - 12:29 am.

      The erroneous working assumption here is that an accident could actually be “fixed” with money.

  2. Submitted by Claire Dempsey on 11/02/2018 - 01:09 pm.

    Thank you for this article Walker. This issue has gone on for quite a while, and is extremely complex, so your four takeaway points were very helpful. The potential risk if something goes wrong is so huge that it is hard to believe the financial assurance package really covers all possibilities and the decades of work that would be needed.

  3. Submitted by Phyllis Kahn on 11/02/2018 - 04:00 pm.

    I have continually pushed the point of financial assurance. Looking at all the failed projects around the country the financial assurer went belly up at the same time as the company. What is needed is a certified bonding company to provide a back up bond.

  4. Submitted by richard owens on 11/02/2018 - 04:32 pm.

    “In order for the low-grade copper to be mined at a profit, the sulfide mine needs to be 2-4 times the size of the one outlined in the permit application. From PolyMet’s filings with the Canadian Government, we know that PolyMet is planning to make the mine FOUR TIMES as large.
    PolyMet is doing a bait and switch.” *

    * Friends of the Boundary Waters
    (The article says “double” the size referred to in the permit.)

    Financial assurances cannot “fix” a catastrophic collapse of the containment’s poisonous acid, most likely to be caused by deluge rains that fall too fast for a revers-osmosis system to release enough water to stop the breach.

    It does feel like a “done deal”. If only Minnesotans and especially Rangers knew the track record of poisoned groundwater caused by sulfide mining in Canada, and Wisconsin and wherever wet environments host this chemical extraction, they would re-consider. This is not taconite.

    “We didn’t inherit the Earth from our parents, we are borrowing it from our children.”

    -Chief Seattle

  5. Submitted by Nick Foreman on 11/05/2018 - 10:36 am.

    Any damage to the environment from this mining should receive absolutely no money from the state coffers to fund any cleanup. Mining companies are the consummate liars.

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