Serving Northern St. Louis County, Minnesota

Nolan bill would clear way for PolyMet land exchange

Marshall Helmberger
Posted 7/5/17

REGIONAL— Rep. Rick Nolan has introduced a bill that would enshrine a 6,650-acre land exchange between the U.S. Forest Service and PolyMet Mining in federal law, using the current appraisal of the …

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Nolan bill would clear way for PolyMet land exchange

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REGIONAL— Rep. Rick Nolan has introduced a bill that would enshrine a 6,650-acre land exchange between the U.S. Forest Service and PolyMet Mining in federal law, using the current appraisal of the property. The bill (H.R. 3115), introduced June 29, would render an ongoing lawsuit by environmental groups moot were it to pass, clearing away a threat that PolyMet officials contend endangers the company’s stock price and its prospects for attracting financial backing for the project.

A federal district court heard oral arguments in late April on a motion by environmental groups for a preliminary injunction on the land exchange until a court could determine whether the exchange meets the standards of federal land valuation. In an affidavit included in their motion to deny the injunction, PolyMet Manager of Environmental Permitting, Kevin Pylka, said granting the request “would have a negative impact on the public market value,” of the company. A decision on the injunction is expected soon.

PolyMet’s stock price jumped to 94 cents a share in January, following the Forest Service approval of the land exchange, but has slid by more than a third since then as investor worries about a potentially protracted legal fight have grown. The company’s stock was trading at 61-cents a share as of Wednesday— close to the all-time low for the stock, which at one time traded for more than $4 a share.

Nolan’s bill could help to buoy the company’s financial prospects, although the measure would eliminate a $425,000 equalization payment that the Forest Service had planned to make to PolyMet as part of the land exchange. Prospects for passage remain unclear, but Nolan does have six Republican co-sponsors for his bill, along with Minnesota Seventh District Congressman Collin Peterson, a Democrat.

The bill was forwarded to the House Natural Resources Committee, which will determine any additional action on the measure. The bill has the support of a number of key House Natural Resources Subcommittee leaders, including Energy and Mineral Resources Chairman Paul Gosar, R-­Ariz., Federal Lands Chairman Tom McClintock, R-Calif., Federal Lands Vice Chairman Bruce Westerman, R­-Ark. and senior House Natural Resources Members Scott Tipton, R­-Colo., and Doug Lamborn, R­-Colo.

The legislation would require completion of the land exchange within 90 days of passage.

The measure does appear to have the backing of Sen. Amy Klobuchar, who issued the following statement when contacted by the Timberjay. “The Department of Natural Resources approved the PolyMet proposal last March. Congressman Nolan’s bipartisan bill will help the region move forward while ensuring that the project continues to be held to the high standards of an independent environmental review process. Mining has always supported good jobs across the Range, and getting this done right is important.”

Sen. Al Franken had no immediate position on the bill, other than to say he’s going to be “studying it in the days to come.” Franken noted that “Iron Rangers have a proud tradition that goes back to when the country was built,” and he said that when mining is done the right way, that tradition will carry on into future generations.

PolyMet officials expressed satisfaction with Nolan’s latest action on behalf of the company. “We are committed to moving the project forward in a thoughtful and expeditious manner and are pleased Congressman Nolan is taking this step to bring closure to the land exchange process,” said Jon Cherry, president and CEO. “In this legislation, Congress would ratify the Forest Service’s determination that the exchange is in the best public interest and moves for the exchange to be completed within 90 days of the bill’s enactment.” Company officials have indicated they are willing to accept the waiver of the equalization payment.

The legal challenge, first initiated by Water Legacy and later joined by the Minnesota Center for Environmental Advocacy, contends that the Forest Service appraisal undervalued the federally-owned surface lands that PolyMet seeks to acquire to clear the way for their planned copper-nickel mine near Hoyt Lakes. “Nobody’s lawsuit contends that the Forest Service can’t do a land exchange,” said Water Legacy attorney Paula Maccabee. “We’ve said they can’t rip off the citizens. Our concern is that it’s a sweetheart deal.”

Kevin Lee, staff attorney at Minnesota Center for Environmental Advocacy, agreed. “Federal law requires land exchanges to be made on an equal value basis to protect taxpayers. Nolan’s bill assigns a bargain basement value of just $550 per acre for the land PolyMet needs,” Lee said. “PolyMet and other mining companies have paid up to five times as much for similar nearby land owned by private landowners.” 

The Forest Service agreed to undertake the exchange in part to resolve a conflict between PolyMet’s plans for an open pit mine and federal law that prohibits surface mining on Forest Service land— such as the land in question— acquired under the Weeks Act. In its record of decision, the Forest Service acknowledges that it was proposing the exchange in order to forestall possible litigation by PolyMet over the Forest Service’s interpretation of the Weeks Act.

“Rep. Nolan frequently talks about ‘respecting the process’ on PolyMet, while touting ‘strong standards’ that protect the public. “But his bill shows he doesn’t respect laws that protect taxpayers and that he is working with PolyMet to undermine standards that protect the public,” said Lee.

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