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Walz to Glencore: Honor union accord, add name to permit

Minnesota's Governor met with representatives of Glencore on Thursday, the controversial mining giant that now has a majority stake in the contentious PolyMet copper-nickel project near Hoyt Lakes.

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Minnesota Gov. Tim Walz, then Governor-elect, talks during a news conference at the state Capitol in St. Paul on Nov. 8, 2018. Scott Takushi / St. Paul Pioneer Press
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Gov. Tim Walz has urged Glencore, the Swiss mining giant that recently took a majority of shares in PolyMet , to work with unions and to add its name to numerous permits at an hour-long meeting with company officials Thursday morning.

Glencore now owns 72% of PolyMet’s outstanding shares after it bought additional shares in a June rights offering, eliminating over $240 million in debt PolyMet owed Glencore.

The move gives Glencore considerably more control in PolyMet, the company trying to open Minnesota's first copper-nickel mine near Hoyt Lakes. But it was a move many saw coming, and PolyMet opponents have long raised concerns over Glencore’s labor and environmental record.

Walz said he wanted Glencore to walk away from the meeting understanding those concerns.

“There are still questions to be answered, and I made it clear that there’s not a lot of confidence in Glencore, whether that’s fair or not, that is their perception,” Walz told the News Tribune on Thursday afternoon.

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Walz said Helen Harper and Stephen Rowland, both Glencore employees and members of the PolyMet board of directors, met with officials from the Minnesota Pollution Control Agency and Department of Natural Resources.

Walz said he urged the two to honor the project labor agreement PolyMet signed in 2007 that promised the use of union labor to build its mine and processing facilities, to sit down with the United Steelworkers union to discuss a potential unionized mine workforce and to be open to the addition of Glencore on the permits.

Critics have said that without Glencore’s name on the permit, the mining giant would be off the hook for any reclamation if the mine were to close unexpectedly.

But as a condition to the permit to mine granted in November, the DNR required PolyMet to fund a financial assurance package to the DNR so the state can reclaim and close the mine and plant sites if PolyMet were to close them.

PolyMet posted $74 million in financial assurance prior to its permit to mine, which is expected to grow to $588 million when mining begins and exceed $1 billion at peak mining. The amount can be evaluated each year by the DNR.

Ultimately, the DNR can add Glencore to the permit under a longstanding operating principle, Walz said. Glencore was not a majority shareholder when the DNR granted PolyMet a permit to mine and other permits last year.

Walz said Glencore was not particularly warm to the idea of adding its name to the permit because the company said it could affect financing option in the eyes of banks and lenders. PolyMet still needs to raise almost $1 billion in project financing to build its facilities.

“(Glencore) did not immediately acknowledge that it would be Glencore’s name,” Walz said. “We made it very clear to us there's some conversations that need to happen here.”

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PolyMet said the company was grateful for Thursday’s meeting with Walz, but the company did not answer News Tribune questions on whether Glencore would be added to its permits or whether PolyMet and Glencore would be open to sitting down with the United Steelworkers union to discuss whether the mine could be unionized.

“We appreciate the time Gov. Walz spent with us today, and are grateful for the opportunity to hear his vision for how the project will move forward. We discussed many topics, and this is the first of many ongoing conversations we will have,” PolyMet spokesperson Bruce Richardson said in an emailed statement to the News Tribune. “Our immediate focus is to obtain construction financing and continue plant site preparations under our existing Project Labor Agreement.”

Last month, Minnesota Pollution Control Agency Commissioner Laura Bishop told the News Tribune that she wanted to use the meeting between the state and Glencore to discuss enforceability.

At the time, Bishop said the agency was exploring what would happen if Glencore were added to the MPCA permits, but believed enforceability would be possible regardless.

“We believe that we have the same enforceability no matter who's majority holder,” Bishop said. “Those were issued to the project itself.”

Opponents of PolyMet argue the project could send tainted runoff into the St. Louis River watershed and Lake Superior while supporters say the project would bring much-needed jobs to the region.

Lawmakers reiterate support for PolyMet

Separately on Thursday, 70 Minnesota state lawmakers, both Republicans and Democrats, sent a letter to Walz reiterating their support for the PolyMet project and clarifying what they said were “false attacks against valued industries in our state like mining.”

It was a response to a letter sent last month by 18 Democratic state lawmakers urging Walz to drop permits for the after what they called a “flawed process” when MPCA officials in 2018 urged the Environmental Protection Agency not to comment on a draft of the permit until the public comment period had ended.

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On Tuesday, the Minnesota Court of Appeals put a hold on the permit because the agencies had departed "from typical procedures in addressing the permit."

PolyMet
Plans for PolyMet include building dams to increase the storage capacity of tailings basins. One would be built in the distance to raise the basin on the right to the level of the area on the left. (file / News Tribune)
Steve Kuchera / 2017 file / Duluth News Tribune

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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