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EPA drops Mesabi Nugget's variance for sulfate

The U.S. Environmental Protection Agency has reached a settlement with the Fond du Lac and Grand Portage Bands of Lake Superior Chippewa and two environmental groups over the sulfate discharge form the Mesabi Nugget iron nugget plant near Hoyt lakes.

The EPA has agreed to drop its approval of a variance for how much sulfate and other three pollutants that Mesabi Nugget can discharge into Second Creek, which flows into the Partridge River, a tributary to the St. Louis River.

Sulfate is a major issue in Minnesota now as scientists and state regulatory officials are working to decide how much is too much for wild rice. The pollutants include bicarbonates, salts or solids like sulfate, and conductivity.

The state's current standard is 10 parts per million for sulfate in waters that grow wild rice. But the Minnesota Pollution Control Agency gave Mesabi Nugget a variance from the state limit nearly 16 times the current state standard, opponents claimed. The EPA agreed to the state PCA variance in December 2012.

The variance allowed Mesabi Nugget to store its discharge during the summer growing season then release it after the growing season. But environmental groups said that sulfate released at any time can affect wild rice because they build up in the ecosystem.

The Fond du Lac and Grand Portage Bands, Water Legacy and Minnesota Center for Environmental Advocacy filed suit against the EPA in federal court last year, saying the variance should not have been allowed.

On Monday, the EPA and U.S. Attorney's office filed notice in Federal District Court in Minnesota that they would remand the decision to approve variance. Federal Judge Jack Tunheim is expected to agree to the terms. In the court document filed Monday the EPA said it will formally dismiss the variance as soon as the judge's decision is made.

The EPA's decision "sends a strong message that established environmental standards that protect clean air and water need to be enforced," said Scott Strand, MCEA executive director, in a statement.

It's not clear whether Mesabi Nugget will try to seek a new variance or somehow move to reduce the pollutants in question. Jeff Hansen, Mesabi Nugget plant manager, did not immediately return a request to comment on the EPA decision.

Karen Diver, Fond du Lac tribal chairwoman, said the EPA's decision marks a landmark in defense of the Clean Water Act. Environmental and tribal groups have been saying that mining discharges often contain too much sulfate and that the state and federal governments have been neglecting to enforce existing state rules.

Diver noted the iron nugget plant is in the heart of the 1854 ceded territory where the Ojibwe have the right to hunt, fish and gather.

"This case was about maintaining the wildlife habitat and wild rice waters where band members exercise their treaty rights, and about protecting the rights of all Minnesotans to have clean water," Diver said in a statement. "We are glad to see the EPA step up and admit it made a mistake in granting this variance."

Grand Portage Chairman Norman Deschampe said the bands "are not against mining, and support the jobs mining brings to the Iron Range. But industry has to comply with the Clean Water Act and acknowledge our treaty rights."

Paula Maccabee, attorney for Water Legacy, said the variance made a special regulation for one company that defied state law.

With this agreement "the EPA is they are willing to hold everyone to the rules," Maccabee told the News Tribune. "I don't know whether Mesabi Nugget will try to get a new variance and a new permit or if they will use reverse osmosis or something else to reduce the pollution they are discharging."

PCA officials Monday afternoon said they hadn't yet see a copy of the agreement and could not comment. They also noted they have not been part of the court negotiations.

Mesabi Nugget opened in early 2010 producing a 97 percent pure iron nugget that can be made directly into steel, a refinement of the basic taconite iron ore concentrate common on the Iron Range. The $300 million facility has had issues ramping up to full production. It's employed about 90 people.

In late January, officials for Indiana-based Steel Dynamics Inc., majority owner of Mesabi Nugget, said Mesabi Nugget lost money in the fourth quarter while producing about 30,000 tons of nuggets per month used in Steel Dynamic's electric hearth steelmaking furnaces. Company officials told industry analysts that the viability of the plant's operations were being evaluated.