PolyMet mine gets green light from Minnesota regulators

State regulators on Thursday gave PolyMet Mining Corp. the green light to move forward with a $1 billion copper/nickel mine near the Iron Range, nearly completing one of the longest and most contentious environmental reviews in Minnesota's history.

The Minnesota Department of Natural Resources (DNR) said it has issued a set of long-awaited permits PolyMet needs to proceed with the 6,000-acre open-pit mine, tailings basin and processing plant at the former LTV taconite site near Hoyt Lakes. It includes a financial assurance plan that would eventually peak at more than $1 billion to protect taxpayers against future cleanup costs and accidents, and pay for a water treatment plant that would operate for decades after the mine closes.

"I am much comforted by the fact that we have that strong framework in place," said DNR Commissioner Tom Landwehr, describing the six water-appropriation permits, two dam-safety permits, a public-waters work permit, and an endangered-species takings permit for PolyMet's proposed mine.

The project, however, still needs water and air quality permits from the Minnesota Pollution Control Agency, which typically would require it to launch within five years, and a wetlands permit from the U.S. Army Corps of Engineers. The U.S. Environmental Protection Agency is now reviewing the outstanding state permits, and state regulators expect that process to be complete by the end of the year. "It's a really big day," said Jon Cherry, chief executive of PolyMet, a publicly held company based in Toronto. "We've been working on this for a long time."

He said that if the last permits are finalized and the company succeeds in getting the necessary financing, construction is expected to begin next spring. While some outside financial experts have questioned the company's ability to raise necessary financing, Cherry said that with the DNR permits in hand, "there is a lot of interest" from potential investors.

The project, which has been under review for 14 years, would dig copper, nickel and other precious metals from a massive, untouched deposit east of the Iron Range. The company says it will create an estimated 300 jobs, and resurrect a once-bankrupt taconite processing facility. Initially, it would process 32,000 tons of ore a day, with the potential to eventually triple production.

But it has generated immense conflict, because compared to taconite mining, this so-called hard rock mining carries far greater risks to water. The waste rock can produce acid that leaches heavy metals from the ground, threatening local lakes and rivers with toxins. And the project relies on a 1950s-era tailings basin that environmental groups say is a risk for catastrophic failure.

As a result, the project has created a jobs-vs.-the environment fissure across the state, and has become a potent political issue, especially in the hotly contested congressional race in the Eighth District, which includes the Iron Range. While Landwehr denied that the announcement had anything to do with politics, its timing just days before midterm elections was hard to miss.

It signaled to working-class voters — especially in the northeastern region of Minnesota that President Donald Trump won handily in 2016 — that a Democratic administration would support mining projects, even at the risk of upsetting the often louder environmentalist voices in the DFL.

The permit also sent a message to unions like the operating engineers and the carpenters, which long supported Democrats but have flirted with Republicans in recent years, that they should mobilize for the DFL in the upcoming election.

Only minutes after Landwehr's announcement, Eighth District congressional candidate Joe Radinovich, a Democrat, released a statement calling it "good news for the future of our region and for the future of mining."

His Republican opponent, Pete Stauber, was not to be outdone, however. He touted his support from Trump and his work lobbying the president to reverse a temporary mining ban in the Superior National Forest, on the doorstep of the Boundary Waters Canoe Area Wilderness.

Democratic gubernatorial candidate Tim Walz was more measured. He said in a statement that if the project meets environmental standards and has financial protections, it should go forward.

"Minnesota has some of the strongest labor, financial, and environmental protections that should continue to be strictly enforced," he said.

Jeff Johnson, the Republican nominee for governor, applauded the approval but said it took too long. He also took a shot at his opponent, saying Walz "will more likely attend a protest rally than a ribbon-cutting for the next big Minnesota project."

Meanwhile, the state's leading environmental groups were quick to sharply criticize the decision.

Kathryn Hoffman, chief executive of the Minnesota Center for Environmental Advocacy, a nonprofit law firm, said the DNR failed citizens because it refused to conduct an independent judicial review of the project's environmental impact, which several environmental groups had requested.

Among other issues, the contested case hearing would have addressed serious concerns about the safety of the tailings basin that had been raised by the DNR's own consultants. Eventually, the LTV basin will hold 225 million tons of mine waste, including heavy metals and other pollutants, in a pit that will require maintenance for decades.

Some had urged the DNR to require PolyMet use what is now the industry standard of drying out the tailings and covering them. But DNR officials said that the tailings basin will be retrofitted with liners and buttresses, and any accidents will be covered by financial assurance.

Hoffman said such major decisions deserved independent review through a contested case hearing.

"Contested case hearings are routine for large projects such as pipelines and power plants, and they're regularly held for permit decisions large and small," she said. "It is special treatment for PolyMet to skip this vital step for the first copper-nickel mine."

Hoffman also accused PolyMet of a "bait and switch" because the project could ultimately be three times bigger than the one first proposed, which warrants further environmental review, she said. The DNR refused to do that.

"We are confident that the project can be built, operated, and reclaimed in compliance with Minnesota's rigorous environmental standards," Landwehr said Thursday. "This does not mean that the project will not have impacts, but it does mean that the project meets Minnesota's regulatory standards for these permits."