Glencore deal to purchase all of PolyMet moves forward

A special committee of PolyMet Mining's board of directors has approved Glencore's full ownership of the company.

The two companies announced earlier this month that Glencore plans to buy the 18% of PolyMet it doesn't already own for about $73 million.

PolyMet announced Monday that a committee of independent directors — board members not affiliated with Glencore — had inked a definitive sales agreement. The deal still needs full board approval, but that is likely.

Earlier this month, Glencore offered $2.11 a share for the 18% stake it doesn't own in PolyMet. That's a 167% premium over PolyMet's closing price of 79 cents a share the day before the offer.

Since 2005, the mining company PolyMet — which is based in St. Paul and registered in Canada — has been trying to open a copper mine a few miles away that would send ore here for processing and waste disposal. But the project recently lost a key permit and now, 18 years on, has no official opening date.

The saga of PolyMet and two other hardrock mines proposed in Minnesota highlights a dilemma playing out globally. Demand for copper and nickel is surging thanks to a worldwide transition to clean electricity and electric vehicles, which is driven by government policy and improving economics. But the mineral supply is not keeping up, with opposition to proposed mines like PolyMet.

Glencore, a Switzerland-based global mining giant, began financing PolyMet in 2008 with $25 million in debt that was convertible into equity. Over the years, it has continued to use that same financing mechanism, and by 2019 it had amassed a 29% stake.

With a shareholder-right offering in 2019, Glencore took control of PolyMet with a 72% stake, which has since grown to 82%.