Prospect of larger PolyMet mine sparks demand for more review

Three environmental groups asked the state Friday to reopen its environmental review of Minnesota's first proposed copper-nickel mine because, they say, the company is banking on a mega-mine that's two or three times larger than the one it first proposed.

Citing a recent financial filing by Toronto-based PolyMet Mining Corp., which outlines the much-larger profits that would come from a larger mine, the environmental groups say "the change in the scope … is the very sort of tectonic shift that would justify" further environmental review.

At the heart of their concerns, said Kevin Lee, an attorney at the Minnesota Center for Environmental Advocacy, is the safety of a 1950s-era tailings basin where PolyMet proposes to store waste from the $1 billion mine and ore processing facility near Hoyt Lakes. Lee said the groups found that plan worrisome even with a  32,000-ton per day operation, which is what the company proposed and which is now in the state's final permitting phase.

But if the company expands its operation to 118,000 tons per day, as forecast in a report to potential investors, "that is a very real environmental risk," Lee said. "History shows it is exactly this type of situation where accidents happen."

That's what happened in two recent mining disasters, he said: the 2014 Mount Polley dam failure in British Columbia that released a billion gallons of contaminated slurry, and, a year later, a dam failure at an iron mine in Brazil that killed at least 11 people.

Officials from the Minnesota Department of Natural Resources, the lead regulator on the project, said they will review the groups' request.

PolyMet officials said in a statement that the project is financially feasible at the size originally outlined.

"Any potential future expansion scenarios are speculative, and would require significant further investigation and planning," they said. "And we would not pursue any such scenarios without going through additional environmental review and permitting as appropriate."

PolyMet, which has been under environmental review for nearly a decade, would be the first to mine copper, nickel and other precious metals from a deposit east of the Iron Range, creating some 300 jobs.

The project has always been tied to a 2½-square-mile taconite basin near Hoyt Lakes that would eventually hold hundreds of millions of tons of ore processing waste, perhaps for centuries. It was originally built to hold tailings from the now-bankrupt LTV taconite plant that PolyMet acquired and which is now integral to its mining plan.

PolyMet has made structural improvements to the dam. But starting in 2012 and as recently as last year, some of the DNR's own hired experts have raised concerns about its safety. Nonetheless, the DNR's panel of expert dam safety engineers signed off on the plan, saying there was little risk of failure in the short term.

In March, PolyMet said the project would generate a 9.6 percent rate of return at its proposed size — modest for what could be a high-risk investment. But running at 118,000 tons per day, the project would generate an after-tax rate of return approaching 24 percent, the report said.

"There is no longer any doubt that the current mine proposed by PolyMet is but the first step in a larger project to extract and process the entirety of the deposit they control, up to almost 120,000 tons per day," the environmental groups said in a letter to the DNR and other state and federal agencies. They said state and federal law require supplemental environmental reviews, which can only take up to 120 days, when it's reasonably foreseeable that a project will expand or change.

The other environmental groups are the Center for Biological Diversity, based in Tucson, Ariz., and Friends of the Boundary Waters Wilderness.

The agencies have 30 days to respond.