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Our view: PolyMet financial assurance will be key

For years, critics and outright opponents of proposed precious-metals mining in northern Minnesota have been clamoring for the number, eager to pounce on it as not enough.

The long-sought figure, a dollar amount, is how much PolyMet Mining will be required to put up in financial assurance should the unheard-of happen, should the bottom unexpectedly drop out and metals-mining operations suddenly cease here, and should the company go out of business, leaving an environmental mess behind or even just an abandoned mine in need of closing.

Finally, after more than a decade of planning, review and often-heated debate, the PolyMet process reached the point Thursday at which the number is to be determined. The company announced it submitted its permit-to-mine application to the Minnesota Department of Natural Resources, the permit that will allow construction of the mine to begin followed by actual mining and the permit that will include the financial assurance.

As with practically everything else related to PolyMet, expect the coming financial-assurance determination to be as controversial as Thursday’s announcement was historic. This is Minnesota’s first-ever such permit application. And the state never before has determined financial assurance for a mining project or any other project.

Be assured, though, that the state won’t go it alone as it considers PolyMet’s 15,000-page application and prepares a draft permit for review and scrutiny before a final permit is issued. The DNR will consult with industry-expert consultants as it considers all details, the highest-profile of which is expected to be financial assurance.

PolyMet is proposing $12 million for the first year of construction, $44 million for the second year of construction and $197 million for the first year of mining. Financial assurance can come via letters of credit, insurance, bonds, trust funds and other financial instruments, the banks and other issuers of the backing doing their own due diligence on the validity of PolyMet and its project. So the public can be assured, too, that if financial institutions are willing to put up big bucks, the project is being done properly and is being watched closely.

The public also will have a big say.

“This is just the beginning of (the permitting) process,” Brad Moore, PolyMet’s executive vice president of environmental and governmental affairs, said in a meeting this week with a News Tribune reporter and the Opinion page. “When the draft permit is issued (by the DNR, the public is) going to have a chance to weigh in on the financial assurance. Does the public like the instruments that were used? The dollar amounts? The reclamation plan? They’ll have an opportunity to comment on that. And then, based on those comments, the DNR will make some additional changes to that draft permit before they make a final decision” to allow construction and mining to begin.

The financial assurance figure is to be reviewed and readjusted annually by the DNR with input from PolyMet, independent experts and others. During the height of mining the annual amount PolyMet is expected to have to put up will be in the hundreds of millions of dollars, Moore said.

With so much at stake — PolyMet’s mine is expected to provide 360 good-paying, long-term jobs with an annual economic benefit to St. Louis County estimated at $515 million by a University of Minnesota Duluth study — getting it right can be the highest of priorities. There’s no reason financial-assurance numbers can’t be reached amicably — just in case the unheard-of happens.

An inclusive, transparent process is in place. It can continue to be followed.

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