Appeals court sides with PolyMet

May 28, 2019

The Minnesota Court of Appeals sided with PolyMet and ruled that state regulators should not have to conduct additional reviews of the proposed copper-nickel mining in northeastern Minnesota.

Three conservation groups alleged in appeals that PolyMet intends to build a much larger mine than what was originally proposed to the state, and argued that therefore the Minnesota Department of Natural Resources should conduct a supplemental analysis to weigh additional environmental risks from a larger project, Minnesota Public Radio reported.

The Minnesota Court of Appeals disagreed, writing that any possible mine expansion was "speculative," because PolyMet has not filed expanded plans with the state, and therefore did not require the DNR to complete the supplemental environmental impact statement that the environmental groups demanded.

The DNR signed off on the final environmental impact statement for PolyMet in early 2016, a required regulatory step that laid the groundwork for the many state and federal permits the company has since received to move forward with its proposal.

PolyMet still faces funding challenges. The company recently announced a major stock offering intended to clear its balance sheet by paying off debt to Glencore, a Swiss commodities giant that is the company's largest financial backer.

Environmental groups have filed a number of different lawsuits seeking to block PolyMet from moving forward, but this is the first formal opinion that's been issued in those cases. The groups say they are weighing whether to appeal the decision to the Minnesota Supreme Court.

A key issue in this case is a technical report that Toronto-based PolyMet submitted to Canadian regulators last year, in which PolyMet indicated it could earn a substantially higher rate of return by building a much bigger mine at the site, located just outside Babbitt on the edge of the Iron Range.

The Minnesota DNR analyzed a mine project that proposes to process 32,000 tons of ore per day. But the Canadian report lays out a possible 118,000-ton-per-day operation, which could substantially increase profits for the company.

But the Court of Appeals panel deferred to the DNR, which determined that the discussion of mine expansions in the technical report did not require additional review, since "expansion remains speculative" and the DNR "had received no formal notification of a project change."

State officials have said that any proposed expansion would require a new environmental review and permitting and public comment process before it could move forward.

PolyMet is bidding to open the state's first copper-nickel mine near Babbitt and Hoyt Lakes, on the far eastern edge of Minnesota's Iron Range. Local backers say the project would create 360 direct jobs, potentially hundreds more spin-off jobs, and inject tens of millions of dollars into the regional economy.

Company CEO Jon Cherry said the court's decision reaffirms the lengthiest environmental review in the state's history, and "appropriately addresses the scope of our plan to responsibly mine copper, nickel and precious metals from the world-class Duluth Complex in northeastern Minnesota."



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