REGIONAL—While the Final Environmental Impact Statement on PolyMet’s proposed NorthMet mine may be the DNR’s last word on the environmental review, it’s only intensified the long-simmering debate over what would be the state’s first copper-nickel mine.

For supporters of the project, the release of the document, ten years in the making, was cause for celebration and a sign that hundreds of new jobs in the mining sector could be in the offing.

“Completion of the Final EIS is a huge milestone for PolyMet, for the Iron Range communities, and for the state of Minnesota,” said Jon Cherry, company president and CEO.

“Although there are several more steps in the process, including the actual permitting, I’m looking forward to seeing this project become a reality,” said Sen. David Tomassoni, DFL-Chisholm.

U.S. Rep. Rick Nolan, who represents northeastern Minnesota, called the document “a major milestone” and called on regulatory agencies to move forward with permitting as quickly as possible.

PolyMet supporters found plenty to like in the FEIS, which determined that a long list of mitigations, including centuries of water treatment, replacement of nearly 1,000 acres of wetlands that will be eliminated by the project, and improvements to the existing LTV tailings basin (which PolyMet plans to utilize for its own operations) would reduce the environmental impacts to acceptable levels.

At a press conference last Friday, DNR Commissioner Tom Landwehr said his agency, along with the Army Corps of Engineers and the U.S. Forest Service, brought “the highest level of rigor and objectivity to the NorthMet environmental review.” While the two federal agencies shared the title of co-leads on the project, it was the DNR that was the primary driver behind the environmental review process— and Landwehr called it a “neutral evaluation based on information from the company, our own analysis, and the comments we received”

But critics of the project described the document much differently, noting that the DNR is legally obligated to promote mining in the state. As such, they’ve long been skeptical that the DNR was acting as a neutral party in the environmental review process.

Even so, environmentalists say the FEIS reveals a project that they say is a bad deal for the state. “Even if all their rosy projections are correct, we have 20 years of mining, and when it’s done, we have to treat the water for hundreds of years,” said Kathryn Hoffman, attorney for the Minnesota Center for Environmental Advocacy. She said until the DNR discloses who will pay the cost of clean-up, critical information is missing from the environmental review. “We’re talking about wastewater treatment plants, barriers, pumps, for hundreds of years, but we never hear how those are paid for,” she added.

Tribal authorities, which served as cooperating agencies on the FEIS, have also been sharply critical of the water modeling used in the study, arguing that some of the key inputs into the model were inaccurate, leading to flawed results. That’s led to questions about how much untreated wastewater might actually escape the NorthMet mine as well as which direction it will flow.

Financial

questions

Investor reaction to the FEIS’s release was more sanguine. The company’s stock jumped 10 percent on the news Friday, but gave back that gain on Monday. As of Wednesday, PolyMet stock was trading at an even $1.00 per share. Even with this week’s modest gains, PolyMet stock continues to trade at levels far below its 2006 peak of $4.70 a share.

The PolyMet project still faces a financial review that’s likely to reveal that the project’s economics have taken a significant turn for the worse, given the deterioration in the metals market globally. Gov. Mark Dayton called for that review late last month as he began to focus in on what he said will almost certainly be the most difficult and controversial decision of his administration.

Dayton said he wants assurance that the company will have the financial wherewithal to develop the mine, with its initial upfront construction cost of approximately $650 million. The requirement to post financial assurance bonds could add significantly to that overall price tag.

PolyMet officials insist their mine plan remains highly profitable, despite the recent downturn in the metals market.

Potentially

valuable ore body

The prospect that Minnesota’s first copper-nickel mine could be permitted within a year is raising hopes among mining advocates that a long-discussed copper-nickel boom could soon be on its way, generating potentially thousands of jobs and millions of dollars in state and local revenues. PolyMet sits towards the southwest end of a geological formation, known as the Duluth Complex, which extends more than 100 miles to the northeast, running just southeast of Ely, and east, along the southern edge of the Boundary Waters Canoe Area, all the way to the Gunflint Trail.

Already, geologists and mining companies have identified more than a dozen deposits, similar to or richer than PolyMet’s NorthMet deposit, stretching almost continuously for over 30 miles from south of Aurora to the Spruce Road, south of Ely.

Twin Metals, another copper-nickel mining company, owned by Chilean copper giant Antofagasta, has already proposed its own operation near Ely and the approval of PolyMet is likely to advance that project as well.

When Rick Sandri, president of Twin Metals’ former parent company, Duluth Metals, talked of his company’s plans, he described PolyMet as “the snowplow” for an entirely new mining district, which boosters routinely describe as equal to or greater than the Mesabi Iron Range.

Environmentalists note that the sulfide ores that contain the copper, nickel, and precious metals that PolyMet hopes to eventually mine are more dangerous than taconite. The sulfur contained in the ore, when exposed to air and water, creates acid mine drainage that can leach heavy metals and other toxins from wasterock left behind. They also worry about the impact of a more-or-less continuous sulfide mining district in the heart of the Superior National Forest, that stretches to the boundary of the popular Boundary Waters Canoe Area Wilderness.

Next steps

The official release of the FEIS triggers a 30-day public review period, from Nov. 13- Dec. 14, during which the public can weigh in on the adequacy of the 3,500-page document. Commissioner Landwehr said his agency will consider those comments as part of its own analysis, although Landwehr said he expects he’ll rule that the study is complete, a decision that agency officials say should come in February.

Public comments can be submitted electronically at NorthMetFEIS.dnr@state.mn.us or by mail to: Lisa Fay, EIS project manager, Minnesota DNR Ecological and Water Resources Division,Environmental Review Unit, 500 Lafayette Road, Box 25, St. Paul, MN 55155-4025.

The document, along with nearly two dozen fact sheets is now available on the DNR’s website www.mndnr.gov/polymet.

The two federal co-lead agencies must also complete their own reviews and make their own determinations. Only then can PolyMet begin applying for the nearly two dozen permits it will need for air, water, waste and mine operations. Landwehr said any of those permit applications could trip up the project.

And while the FEIS largely avoided details on financial assurance, Landwehr said that will be a key part of any permit to mine that his agency may eventually issue. That will ultimately be the subject of negotiation and will, undoubtedly, be a key issue that both advocates and critics will debate over the coming months.

PolyMet officials say they plan to offer a financial assurance proposal shortly after the DNR issues its adequacy decision.