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PolyMet gets approval of environmental review from Minnesota officials
March 4, 2016

Officials in Minnesota approved the environmental review of PolyMet Mining Corp.’s NorthMet project.

The approval is a turning point for PolyMet, but does not necessarily clear the way for construction of the $650 openpit mine.

“The real decisionmaking process begins now,” Gov. Mark Dayton said of the approval. “I remain genuinely undecided.”

Tom Landwehr, commissioner of the Minnesota Department of Natural Resources (DNR), announced that the 3,500-page environmental impact statement for the proposed mine near Hoyt Lakes adequately reflects the risks and the protections the mine will require. “We are confident this document has thoroughly examined the important environmental topics and has addressed them,” he said.

The StarTribune reported that two federal agencies must still complete their regulatory processes, as well. In late spring the U.S. Forest Service is expected to make its final decision on exchanging its land, where the mine would be located, with land that PolyMet will buy to replace it. The U.S. Army Corps of Engineers, which regulates wetlands mitigation, is expected to take longer.

And in February, a federal judge ordered the Environmental Protection Agency to fulfill a 30-year-old obligation to create rules for financial protections for mines that would pre-empt Minnesota's law. They are due out at the end of this year and must be finalized by 2017.

Still, the state's announcement is a significant milestone in a project that’s been underway since 2006.

For Toronto-based PolyMet, the successful environmental review is proof to shareholders that the company has taken a major step toward a project they hope will be profitable.

“This is a historic event for Minnesota, the Iron Range, and for PolyMet, clearing the path for permit applications required for construction,” stated Jon Cherry, president and chief executive officer. The announcement “demonstrates and confirms that the NorthMet Project can be built and operated in accordance with state and federal regulations.”

The release of the report ends the state's largest, most expensive and longest environmental review. Now, state officials will try to negotiate complex financial protections for a project that promises 350 or more new jobs, but one that also carries environmental risk.

PolyMet and state officials have said the project will use modern mining techniques to prevent environmental disasters. But American Indian tribes and environmental groups have said they are not enough and that the calculations to predict future contamination are flawed.

The state has already appointed a committee of experts to advise it in hiring an outside firm that will help devise a financial strategy for financial protections.

PolyMet, meanwhile, is developing a new business plan for the mine that will include a proposal for financial assurance.

By law, the financial protections must be bankruptcy-proof, and the money must be sufficient to cover the cost of closing the mine. The environmental review states the mine will operate for 20 years and then need a reverse osmosis treatment plant for water indefinitely — perhaps for hundreds of years.

PolyMet estimates that closing the mine will cost $200 million, and long-term water treatment and other maintenance would cost up to $6 million per year. Environmental groups have said that based on the estimated costs, the company needs to provide $300 to $400 million now to protect future generations of taxpayers.

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