On one hand, the Minnesota Supreme Court on Wednesday reversed a lower court's decision that would have sent PolyMet's air permits back to state regulators for further review.

But on the other, it instructed a lower court to review whether PolyMet, which is trying to open the state's first copper-nickel mine, deceived the regulators by withholding a report outlining the potential for a much larger mine.

Both opponents and supporters of PolyMet claimed victory in Wednesday's Supreme Court opinion written by Justice Margaret Chutich.

Central to the case is whether a report released by PolyMet in March 2018 — 10 days after the air permit's public comment period ended — outlines the company's plans to recover 118,000 tons of ore per day instead of 32,000 tons per day — the amount listed by the company in permit applications.

The air permits, issued by the Minnesota Pollution Control Agency in December 2018, allow the company to release 250 tons of regulated pollutants per year, but opponents say the company would exceed that limit if it were to recover more ore and called the permits an example of "sham permitting."

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In reversing the Minnesota Court of Appeals' March 2020 decision, Chutich wrote the MPCA did not need to go back and consider the potential for sham permitting as the lower court had instructed.

Chutich wrote the MPCA "was under no federal obligation to investigate sham permitting" during the permitting process and that the lower court had "relied on an erroneous interpretation of federal law" when it sent the permits back to the MPCA in March.

In separate statements, PolyMet President and CEO Jon Cherry said Wednesday's reversal "is another big win and a major step forward in the defense of our air permit," while an MPCA spokesperson said it "appreciates the court’s thorough review of the air permitting process for the PolyMet facility."

Meanwhile, environmental groups celebrated the court sending some of their claims back to Court of Appeals to review whether PolyMet's report for potential larger mine "undermined" the MPCA's conclusion that the company "will … comply with all conditions of the permit" and if the company "failed to disclose fully all facts relevant" and “knowingly submitted false or misleading information to the (MPCA).”

“Today’s ruling underscores that the entire process by which PolyMet obtained its permits in 2018 may have been deceptive and allows us to make this case to the Minnesota Court of Appeals,” Kathryn Hoffman, CEO of the Minnesota Center for Environmental Advocacy, said in a news release Wednesday.

PolyMet is planning to build Minnesota's first copper-nickel mine near Hoyt Lakes and Babbitt. While supporters say it would operate safely and bring much-needed jobs to the region, opponents, which include environmental groups and the Fond du Lac Band of Lake Superior Chippewa, say the project would risk sending toxic pollution into the St. Louis River Watershed, which empties into Lake Superior.

The MPCA has defended the air permit, saying it believes the company could viably operate at the 32,000-ton-per-day limit. It has also said PolyMet's report was "entirely speculative."

The release of the report shortly after the comment period ended was "just a coincidence," a PolyMet attorney said in November oral arguments.

Wednesday's decision meant the air permits are no longer on hold. The permits had been on hold — or stayed, or paused — since the Court of Appeals decision in March 2020.

A number of other PolyMet permits remain on hold amid ongoing court cases.

The Minnesota Supreme Court is also reviewing PolyMet's permit to mine and dam safety permits. It could issue a decision on that soon.

The Minnesota Court of Appeals is reviewing the project's water permits.

This story was updated to clarify the status of the air permits. It was updated at 4:25 p.m. Feb. 25 with additional information.