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Minnesota Supreme Court weighs PolyMet air permits

The Court of Appeals had ordered the permits back to the MPCA and said the agency needed to consider the larger plans.

FILE: PolyMet
A rod mill is seen at the PolyMet processing plant near Hoyt Lakes, which will be used to crush metal-bearing rock from half-sized pieces to small pieces of gravel as part of the process of extracting copper, nickel and other metals from the mine. (2013 file/News Tribune)

The question of whether Minnesota regulators should have considered a report outlining a potentially much larger mine before issuing air permits for PolyMet, the company trying to open the state’s first copper-nickel mine, went before the Minnesota Supreme Court on Thursday

Opponents of the mine argue a report released by PolyMet in March 2018 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.

The Minnesota Court of Appeals in March sent the company's air permits back to the MPCA for review, a move that was appealed by the agency and PolyMet.

On Thursday, MPCA attorney Emily Schilling defended the agency’s decision to grant the air permits to PolyMet and pushed back on the assertion by environmental groups that it had awarded a “sham permit.”

“If there were probative evidence that PolyMet, at the time it accepted those limits, did not intend to operate at that 32,000-tons-per-day limit, but in fact intended and could not operate for a reasonable period of time without expansion and had to go back to the permitting agency to request relaxation of those limits in order to be economically viable, then that’s the type of showing that would result in sham permitting,” Schilling said.

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But Minnesota Center for Environmental Advocacy attorney Evan Mulholland said the report showed just that.

“There’s evidence that not only are they looking at expansion, there’s evidence that the current project is barely economic especially when you look at our expert reports and the rest of the things that were submitted supplementing the record,” Mulholland said.

Schilling and the MPCA interpreted the report differently, arguing it proved the 32,000-ton-per-day limit would be viable for PolyMet.

“Here, MPCA reasonably declined to investigate MCEA’s allegation of sham permitting prior to permit issuance based on its finding that the technical report supports economic viability of the Northmet mine … and the potential expansion scenarios are entirely speculative,” Schilling said.

Associate Justice Margaret Chutich called the timing of the report release “unfortunate” and asked PolyMet why it was released in Canada just 10 days after its permitting public comment period ended in Minnesota.

“I think it was just a coincidence,” PolyMet attorney Jay Johnson said.

In its opinion issued earlier this year, the Court of Appeals remanded the permits to the MPCA to investigate whether PolyMet is actually planning an expansion.

"Of course, once a project is operating, expansion proposals may be viewed more favorably by regulators. If that is the true course being charted by PolyMet, then there is merit to regulators' argument that the synthetic-minor permit is a sham," the court's March opinion said.

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Johnson said the Court of Appeals’ decision went against precedent and should have relied on the MPCA’s expertise.

Chief Justice Lorie Skjerven Gildea wondered if a remand by the lower court was an appropriate action.

“I’m just not sure that a disagreement by an appellate court really constitutes reasons for remand,” she asked.

But Mulholland said the Court of Appeals got it right.

“When you have something that the agency is supposed to do and make findings on, and then it completely fails to address the issue at all, remand is really the more conservative option,” he said, adding that it gives the agency the ability to correct itself.

The air permits case is the second PolyMet case heard by the Minnesota Supreme Court.

Last month, the court heard arguments on the company’s dam safety permits and permit to mine , awarded by the Minnesota Department of Resources, over whether the agency should have required an additional hearing on the project.

The Supreme Court usually takes several months after oral arguments to make a decision on a case.

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Additionally, the project’s water permits, issued by the MPCA, are headed back to the Court of Appeals after a district court judge said the agency did not not break the law or its own policies in trying to keep the EPA's comments and concerns out of the public.

Jimmy Lovrien covers energy, mining and the 8th Congressional District for the Duluth News Tribune. He can be reached at jlovrien@duluthnews.com or 218-723-5332.
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