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Minnesota DNR rules PolyMet environmental review is 'adequate'

A PolyMet Mining official explains in December 2013 how the company will use rod mills, one of which is at right, to crush metal-bearing rock from 1/2-sized pieces to small pieces of gravel as part of the process of extracting copper, nickel and other metals from the planned mine. The mills are part of the old LTV processing plant now owned by PolyMet. (News Tribune file photo)

Minnesota Department of Natural Resources Commissioner Tom Landwehr on Thursday ruled that his agency’s decade-long environmental review of the proposed PolyMet copper mine project is legally “adequate.”

The decision doesn’t mean the startup company can start mining anytime soon, and it doesn’t affect the federal review of the project that continues on a separate timeline.

But the DNR decision does signal a transition away from environmental review and toward developing details of how the state’s first copper mine might be built and operate.

The company and regulators now will work on the 23 different permits that PolyMet needs before any mining could begin at the so-called NorthMet project near Hoyt Lakes. State officials promise ample input during that permit process.

“We are confident this document has thoroughly examined the important environmental topics and has addressed them,” Landwehr said. “I stand by the conclusions and the foundation of this report. … There hasn’t been a level of environmental review on anything in Minnesota like this before.”

Jon Cherry, PolyMet president and CEO, called the DNR decision “a historic event for Minnesota, the Iron Range and for PolyMet, clearing the path for permit applications required for construction.”

The environmental review decision “demonstrates and confirms that the NorthMet project can be built and operated in accordance with state and federal regulations,” Cherry said in a statement. “We intend to continue to build trust through open dialogue and community involvement as we advance through permitting into construction and operations.”

The 3,500-page environmental review is the DNR’s largest-ever environmental review, taking up more than 90,000 hours of state staff time that was billed to PolyMet for an estimated $32 million. The Supplemental Draft Environmental Impact Statement received the most comments ever — 58,000 — and about 4,000 people attended three public meetings on the issue in 2014.

The DNR decision also clears the way for the first potential lawsuits against the project because it’s the first formal agency action that might warrant court review. The adequacy decision triggers a 30-day window for a legal challenge of the DNR’s environmental review which must be filed with the Minnesota Court of Appeals.

“If you look at mining EIS decisions across the country, almost all of them are challenged,” said Brad Moore, PolyMet executive vice president of environmental and governmental affairs.

Environmental groups contacted Thursday declined to discuss potential litigation. But they continued to pan the DNR review as inadequate.

“This determination is disappointing, given the enormous risks of PolyMet’s deeply flawed sulfide mine proposal and the many questions left unanswered by the” environmental review, said Margaret Levin, Sierra Club state director.

Levin said the DNR review “failed to fully evaluate pollution risks and health impacts and shows that the project would pose an unacceptable threat to Lake Superior — degradation of surface water, groundwater and wetlands, and harm to endangered and threatened wildlife.”

The company and regulators likely could continue to move forward toward permitting during any litigation unless a court issued an injunction. An injunction seems unlikely, however, because developing permits isn’t actual mining and there would be no physical harm until mining actually started.

Thursday’s affirmation of the environmental review, which Landwehr predicted in November unless major new developments surfaced, stops short of a formal endorsement of the project but says the DNR believes its Final Environmental Impact Statement covered all the bases needed. It also means that Landwehr claims the 3,500-page FEIS document responded to all major issues raised by the public, both supporters but especially critics of the PolyMet plan.

The adequacy decision also signals the DNR’s contention that PolyMet can and will meet all state water and air pollution regulations. The PolyMet operations "would not cause any significant water quality impacts,” the final review noted.

Landwehr noted that state law allows projects to have impacts on the environment but requires them to mitigate those impacts as much as possible.

The final report concluded that PolyMet operations won't raise downstream sulfate levels or harm wild rice; won't send tainted groundwater north toward the Boundary Waters Canoe Area Wilderness as some critics have suggested; and won't violate downstream mercury limits.

Critics disagree with those conclusions, saying key elements of the environmental review are based on faulty data or false assumptions, rendering the conclusions invalid.

PolyMet is proposing an open-pit copper mine not far from Babbitt, with processing at the former LTV Steel Mining Co. taconite plant near Hoyt Lakes. The project, estimated at $650 million to build, would employ about 300 workers for an estimated 20 years.

Supporters say the jobs would help diversify the Iron Range economy that is tied to the cyclical and now foundering iron ore mining industry.

“We’ve gotten over a major hurdle,” said state Sen. Dave Tomassoni, DFL-Chisholm, who said the decision will be “uplifting’’ news for the Iron Range where more than 2,000 taconite industry workers currently are laid off.

But critics say the copper, nickel, platinum, palladium, gold and other valuable metals that PolyMet plans to mine and process are locked inside rock that is high in sulfide. When that rock is unearthed and exposed to air and water, it creates acidic runoff that can pull heavy metals and other contaminants out of the rock. Environmental groups claim that runoff, if uncontained and untreated, could taint nearby and downstream waters.

“We are extremely disappointed in the DNR's determination that the PolyMet project is ready to move to the next stage,” said Steve Morse, executive director of the Minnesota Environmental Partnership. “The PolyMet proposal doesn't protect our lakes, rivers and streams.”

What’s next?

Of the 23 state and federal permits that PolyMet needs to start mining, by far the most important are the permit to mine, wetland permits, and air quality and water quality permits.

The state permit to mine will lay out all of the rules the company must follow, including how much money the company must front as financial assurance should problems occur. Most of the rules have been laid out by a 1990s package of state laws that cover nonferrous mining such as copper mining.

It’s unclear how long permitting might take because the project is unprecedented.

The DNR is expected to call PolyMet to the table in coming weeks to lay out what the agency wants to see in the permit applications, and the DNR and Minnesota Pollution Control Agency are expected to hold a joint public meeting, possibly as early as April, on how the permitting process will proceed.

There is a state-mandated 150-day “goal” from the date of application for agencies to either deny or award permits. PolyMet isn't holding its breath that the permits will be approved by August or September, but the company clearly is hoping for permits in hand to start work by 2017.

Once permits are in hand, the company said it will take about 18 months to refurbish the old LTV taconite processing plant and tailings basin and dig the new copper mine. The only hurdles standing in PolyMet's way would be lawsuits and money, or the lack thereof.

PolyMet still needs to raise an estimated $650 million to “build out” the mine and refurbish the processing center to begin production.

PolyMet also will have to buy some sort of bond or insurance policy to cover the estimated $200 million needed to cover any mishaps at the mine — and also to rehabilitate the site after mining ends — plus another $3 million to $6 million annually to cover water treatment at the site that may have to continue decades after the mine is played out.

Landwehr said the DNR will require, in the permit to mine, that PolyMet have enough money in that account so taxpayers won’t have to pay a dime if something goes wrong.

“That’s the intention of financial assurance, yes,” Landwehr said.

At a combined cost approaching $1 billion, no lender or investor is likely hand over that money until PolyMet has permits in hand. Company officials hope to have a financing package in their pocket that will kick in when permits are awarded, with the earliest operations could begin sometime in late 2018.

Dayton “genuinely undecided”

Minnesota Gov. Mark Dayton, who addressed questions on the PolyMet decision with reporters Thursday afternoon, said he had no influence on the adequacy decision and that he won’t interfere with the work of the DNR or Pollution Control Agency as they develop permits.

But Dayton said he would have some role in the ultimate decision on whether the permit to mine is awarded to PolyMet.

“I remain genuinely undecided,” the DFL governor said. "I am not going to interfere with the work of the agencies, but I certainly expect to have a say in that decision.”

While Dayton at one time said the PolyMet mine decision eventually will be his to make, on Thursday he backed away from that, saying he is not the environmental expert.

"The real decision-making process begins now," he added.

Dayton said that his administration is in the process of hiring a Washington, D.C.-based law firm and a financial company with experience in investigating projects such as PolyMet. Their investigation and decisions by his agencies have not been “preordained,” Dayton said.

The governor said he wants "rock-solid" evidence that PolyMet will provide enough money to clean up any pollution left after it closes the mine.

The Minnesota DNR’s decision and entire environmental reiew document can be found at www.mndnr.gov/polymet.

Forum News Service State Capitol correspondent Don Davis contributed to this story.

 
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