Serving Northern St. Louis County, Minnesota

PolyMet submits permit to mine application

DNR predicts review will take “many months”; many questions raised about financial assurance

Marshall Helmberger
Posted 11/9/16

REGIONAL— PolyMet’s submission of an application for a permit to mine is a milestone, according to the company officials, but it will likely be many months, and possibly more than a year, before …

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PolyMet submits permit to mine application

DNR predicts review will take “many months”; many questions raised about financial assurance

Posted

REGIONAL— PolyMet’s submission of an application for a permit to mine is a milestone, according to the company officials, but it will likely be many months, and possibly more than a year, before the state’s Department of Natural Resources might actually issue a final permit.

The 15,000-page application, completed Nov. 3, gives the DNR and the public the most detailed look yet at PolyMet’s proposal. “It lays out how we’re going to construct our copper nickel mine, how we’re going to operate it and how we’re going to close it,” said Brad Moore, Vice President for Environmental and Governmental Affairs for PolyMet. “It shows the whole process from start to finish.”

The application marks the beginning of a lengthy review process by the DNR, other state agencies, and expert consultants hired by the state. DNR officials can’t say how long their review might take, only that it will entail “many months.”

“The review process looks closely at details of the proposed project to determine whether it is designed to meet state standards, provides appropriate financial assurance, and has incorporated the environmental protections outlined in the Environmental Impact Statement,” according to a DNR statement.

Following the review, the DNR is likely to seek changes and set a variety of conditions before it would issue a draft permit for public comment.

Following the comment period, DNR officials say they’ll consider whether to hold a contested case hearing, which could involve weeks of expert testimony from both supporters and critics before an administrative law judge. DNR officials say they’ll make that decision before issuing a final permit.

Environmental critics of the proposal say they they’ll seek such a hearing, which would issue findings of fact at its conclusion and could provide critics an opportunity to challenge some of the assumptions used to advance the project to this stage.

Environmental groups have begun their own review of the permit application, although it could be days yet before they begin to issue more detailed critiques. But Kevin Lee, a staff attorney with the Minnesota Center for Environmental Advocacy, said some problems were immediately apparent. “When you open the financial assurance appendix, one of the key pieces of information is just missing,” he said. Lee said he couldn’t speculate whether the missing information was simply a clerical error by PolyMet or the DNR, or if it represents a bigger issue.

Financial assurance is a guarantee, of sorts, that PolyMet will need to provide before the state can issue a permit to mine. The company would need to post a bond, a letter of irrevocable credit, or other financial instruments to demonstrate that it has set aside enough funding to pay for clean-up and remediation at the site if the company were to go bankrupt prior to mine closure. That’s a common occurrence in the mining industry and it has left taxpayers on the hook in the past for cleanup efforts when regulators didn’t require sufficient financial backup.

PolyMet does make a proposal for financial assurance in its application, which calls for the company to gradually increase its commitment over time through the first dozen years, from $12 million at the start of construction to a total of $366 million at the start of the eleventh year of mining. PolyMet would begin to slowly reduce that amount over the next several years as reclamation efforts are scheduled to begin on some portions of the mine while mining is still underway.

MCEA’s Lee said PolyMet’s gradual ramp-up of financial assurance leaves state taxpayers vulnerable to clean-up and closure costs if the company were to enter bankruptcy relatively early on in its operations, before the full funding is in place.

And Lee said the application includes few details about how the company intends to ensure water treatment at the mine and tailings basin sites for the 200 and 500 years, respectively, that will be required. “The idea that you can try to calculate how much money to put in up front, when you don’t even have a specific proposal how to treat this water for that long is questionable,” he said.

While PolyMet’s environmental liabilities are more limited initially, the company has previously acknowledged that the company will legally be assuming environmental liability for the former LTV facility once the DNR issues a permit to mine. PolyMet has estimated those liabilities alone at approximately $70 million.

Despite lingering questions, the region’s political leaders were quick to hail the latest step forward for PolyMet. “This is a big and historic step forward for jobs on the Iron Range and the state of Minnesota,” said U.S. Rep. Rick Nolan. “After years of intensive environmental review and analysis, it has become clear we have the brains and technology to do both mining and protect our environment.”

Nolan said, in the meantime, he would be working to advance the project with federal regulators, including with the Forest Service and the Army Corps of Engineers, both of which have authority over permitting or over the federal land exchange.

“I’m really glad to see this day,” said state Sen. David Tomassoni, DFL-Chisholm, “It means we are one step closer to PolyMet creating 300 permanent jobs and hundreds more in spin-off work. It’s been a long and difficult few years here on the Iron Range, but I believe things are heading in the right direction,” he said.

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