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State agency challenged in court over $4 million PolyMet loan

PolyMet Mining proposed processing facility at the former LTV Steel Mining Co. plant near Hoyt Lakes, MN
PolyMet Mining proposed processing facility at the former LTV Steel Mining Co. plant near Hoyt Lakes, MN

Finalcut_Polymet_IRRB_loan_hed_20110124.mp314.24 MB

PolyMet Mining Corp. has encountered another stumbling block in its controversial bid to develop what would be Minnesota’s first large scale copper-nickel sulfide mine.

A coalition of five conservation groups sued the Iron Range Resources Board (IRRB) earlier this month over its December decision to loan PolyMet Mining Corp. up to $4 million.  The loan would help PolyMet buy more than 5,000 acres of private lands to exchange for Superior National Forest lands at the company’s planned copper-nickel mine near Babbit, MN.  The land exchange with the U.S. Forest Service (USDAFS) is a critical component of PolyMet’s plans, because while the company owns the mineral rights at the mine site, it does not have surface rights and federal law prohibits open pit mining on the Superior National Forest.

The lawsuit against the Iron Range Resources Board (IRRB), a state agency, was filed Friday, January 14 by five groups; the Minnesota Center for Environmental Advocacy, the Save Lake Superior Association, Friends of the Boundary Waters Wilderness, the Indigenous Environmental Network and the Center for Biological Diversity.  Duluth Attorney Marc Fink is Senior Attorney and Public Lands Forests Director with the Center for Biological Diversity.  He oversees the Center's efforts to protect public lands forests, including the 193-million-acre national forest system.

“We learned that IRRB was considering this loan at their December board meeting, and so we sent them a letter notifying them that issuing this loan prior to the completion of the environmental review process for the mine would be a violation of the Minnesota Environmental Policy Act (MEPA)," says Fink, "but they went ahead and issued the loan anyway."

The groups claim the IRRB loan violates Minnesota laws prohibiting state agencies from providing approvals, permits, or loans for proposed projects that are still going through the environmental review process.

“It’s really a matter of good open government and not prejudicing a decision before it’s made by the state,” says Fink, “and so we really think the proper procedures need to be followed here, especially due to the high profile of this mine project.”

Canadian-owned Polymet Mining Corp., backed by Swiss giant Glencore International, is the first of several companies seeking to mine a geological formation in northeastern Minnesota called the Duluth Complex.  This formation stretches in an arc from Duluth, east to the tip of the Arrowhead in Cook County and contains one of the world’s largest deposits of copper, nickel, cobalt and platinum group metals (PGM’s).  Record high prices for these minerals, advances in processing methods, and a desirable North American location has made the Arrowhead region an attractive target to companies around the world eyeing natural resources worth billions of dollars.

The prospect of a resurgence of mining in the region and the creation of hundreds of jobs has garnered wide support statewide, including that of U.S. Senators Amy Klobuchar and Al Franken, and freshman 8th District Congressman Chip Cravaak.  The PolyMet mine, if approved, would create about 400 jobs on the Iron Range for the projected 20-year life of the mine, and pave the way for similar mining projects to move forward, bringing even more jobs to the area.

But not everyone is convinced that a mining boom would be a good thing for northeastern Minnesota.  Copper-nickel mining, also known as non-ferrous, hardrock, or sulfide mining exposes sulfide bearing waste rock to air and water, generating toxic runoff called acid mine drainage.  Sulfide mines have a generally poor track record in the U.S. and elsewhere, leaving persistent pollution, dead streams, and in some cases, ongoing, taxpayer funded cleanup and water treatment costs.  Introducing sulfide mining to the water-rich environment of northeastern Minnesota, an area known around the world for outdoor recreation and pristine wilderness, is of real concern to many, including Native American tribes in the region.

“The discharges from this project would flow down the Embarrass and Partridge Rivers into the St. Louis River and ultimately Lake Superior.  And so, in that sense, residents of Cook County, and residents of the entire Lake Superior basin should be interested and concerned.”

That’s Margaret Watkins, Water Quality Specialist with the Grand Portage Band of Lake Superior Chippewa.  She’s been working closely with the Fond du Lac and Bois Forte Bands as tribal cooperating agencies in the PolyMet environmental review process.

“Our purpose for being involved in this is to ensure compliance with Minnesota's environmental laws,” says Watkins. “Once acid mine drainage develops on any large scale, no one’s found a way to stop it.  So, what that could mean is perpetual water treatment.  It could mean contaminated water and wetlands forever, also.”

Minnesota’s neighboring state of Wisconsin passed a sulfide Mining Moratorium Law in 1997 requiring applicants to provide examples of other sulfide mines in the U.S. or Canada that have not resulted in significant environmental problems.  This additional burden of proof has effectively resulted in a ban on sulfide mining in Wisconsin.

The PolyMet mine proposal has been under environmental review for more than five years.  The first draft of the Environmental Impact Statement (DEIS) was released for public comment in October of 2009 and was highly criticized by a number of groups, including the U.S. Environmental Protection Agency (EPA).  The EPA blasted the document, giving it the agency’s lowest rating possible, “environmentally unsatisfactory-inadequate.”  The EPA said the mining project, as proposed, would result in “unacceptable and long-term water quality impacts in the Lake Superior watershed,” and directed the parties involved in the environmental review, including the Minnesota DNR (DNR), the U.S. Army Corps of Engineers (USACE), the U.S. Forest Service (USDAFS), and PolyMet Mining Corp., to prepare a supplemental draft Environmental Impact Statement (SDEIS).  That work is ongoing and is not expected to be ready for a second round of public comment for several months.

In spite of the documented risks sulfide mining poses to long-term water quality, supporters say that it can be done safely and the new mines would provide a much needed boost to the state’s economy.  Industry analysts predict that if the PolyMet project is approved, it will launch a modern day mining rush, creating hundreds of jobs and transforming Minnesota’s Arrowhead region into a world class non-ferrous mining district.

On the opposite side of things are those who caution against sacrificing the long-term health of Minnesota’s water resources, including Lake Superior and the Boundary Waters Canoe Area Wilderness, for short term economic gains, and who perhaps question the motives of multi-national corporations seeking to extract billions of dollars in subsurface minerals.