PolyMet Mining, DNR win a round with Minnesota appeals court ruling

In a victory for PolyMet Mining Corp., the state Court of Appeals said Tuesday that a plan to open Minnesota's first copper-nickel mine can move forward without a new environmental review.

The ruling resolves the first of several lawsuits filed by environmental groups since the state Department of Natural Resources (DNR) issued PolyMet a set of permits last year to construct the $1 billion mine near Hoyt Lakes.

With federal and state permits in hand, those lawsuits are the last major legal hurdle PolyMet needs to clear before it can begin work on what it calls its NorthMet mine.

"The court's decision reaffirms the environmental review for NorthMet, which was the most comprehensive and lengthiest in the state's history," said Jon Cherry, PolyMet president and CEO.

The Minnesota Center for Environmental Advocacy (MCEA) and a handful of other environmental groups sued the DNR last spring, saying the permits it issued for the mine were based on a "bait-and-switch," and that PolyMet planned to build a mine that was much larger than the one reviewed by state regulators.

A financial document issued by Toronto-based PolyMet under Canadian securities law showed that the company's highest financial returns would come with a mine three times larger than the one described in its Minnesota permit. A mine three times larger would also more than double the company's and its investors' anticipated after-tax return, the document said.

Environmental groups asserted that expanding the mine is PolyMet's true intention and demanded that the DNR complete a supplemental review on the environmental impact of the larger mine. The DNR refused.

DNR officials have said that any expansion of the mine would have to go through another regulatory review, but until an expansion is actually proposed, it must base its permits on the project that PolyMet has submitted.

Writing for the court, appellate Judge Renee Worke sided with the DNR, saying that the financial document itself characterized the discussion of a larger mine as "preliminary" and that "no permits have been sought for expansion to the project."

The MCEA said in a statement that it will keep fighting "the bait and switch scheme."

"PolyMet is misleading Minnesotans about the true size and risk of their proposal, while telling investors a different story," said Elise Larson, the group's lawyer in the case. "DNR's obligation is to investigate the real proposal."

Larson said the group is reviewing the ruling and its legal options.

But the ruling won praise from Jobs for Minnesotans, a pro-mining group that represents building-trades unions, the Chamber of Commerce and several Iron Range businesses.

"The issued permits allow the project and its supporters to prove that it's possible to mine for these important metals while also protecting the environment," the group said in a statement. "In addition to long-term employment for skilled tradespeople, the NorthMet Project will generate an estimated $515 million annually to cultivate a more diverse and thriving regional and statewide economy."

Several other challenges to PolyMet are still working their way through the courts, including a suit over DNR permits that regulate the safety of the mine and a tailings dam, as well as the original land exchange that gave PolyMet mineral rights at the site.

Greg Stanley • 612-673-4882