11.02.16 polymet page 11.jpg

The former LTV Steel building remains as it did  when the mine shut down in 2000 waiting for new life with PolyMet.

PolyMet Mining’s path to opening Minnesota’s first copper-nickel mine near Hoyt Lakes and Babbitt will take another route through the Minnesota Supreme Court, which said earlier this month that it will review a case challenging the project’s air permits.

It’s the permit-related case the court will hear after PolyMet and the Minnesota Pollution Control Agency petitioned in April for justices to consider a Minnesota Court of Appeals decision in March that sent the air permits back to the agency for review. Judges on the Court of Appeals said the MPCA should have considered a Canadian investor report that said PolyMet was eyeing a much larger mining project, despite applying and being permitted for a smaller one.

“We believe the MPCA in its permit appropriately accounted for the potential effects of the NorthMet Project on the airshed, and are pleased that the Supreme Court will hear the case," PolyMet President and CEO Jon Cherry said in a news release. “The Court of Appeals’ decision creates tremendous uncertainty for companies who want to invest in Minnesota and must seek permits from the state. This is an opportunity to remedy that situation."

Opponents of the project said they were looking forward to defending the Court of Appeals’ decision to the state’s high court.

"The evidence shows that PolyMet hasn’t told the full story. That’s why the Minnesota Court of Appeals expressed concern over 'sham permitting' and told the MPCA to take a second look," said Kathryn Hoffman, CEO of the Minnesota Center for Environmental Advocacy, one of the groups that filed appeals. "The court’s ruling was well-reasoned, and the evidence since then has only gotten stronger about PolyMet’s true intentions."

Environmental groups argued to the Court of Appeals that a financial report required by the Canadian government showed plans to recover 118,000 tons per day. They said PolyMet and its majority owner Glencore could exceed the allowed pollution limit if it recovered more ore.

“If expansion is the current intent, the time to comply with (Prevention of Significant Deterioration) requirements is now," Judge John Rodenberg wrote in the March Court of Appeals opinion. "Of course, once a project is operating, expansion proposals may be viewed more favorably by regulators. If that is the true course being charted by PolyMet, then there is merit to relators’ argument that the synthetic-minor permit is a sham."

PolyMet said the Canadian document is meant to protect investors, but the Court of Appeals said it should weigh on the minds of the regulators even as the proposal for a smaller mine is considered. The company and agency can petition the Minnesota Supreme Court to take a second look at the Court of Appeals opinion.

The Supreme Court has already said it will hear challenges to a January decision that sent PolyMet's dam-safety permits and permit to mine back to the Minnesota Department of Natural Resources and ordered a contested-case hearing on the permits.

The DNR said in a statement at the time that the Court of Appeals’ decision could affect future mining proposals, the state's currently operating iron mines and a wide range of other state permit decisions. The agency called the decision "a significant departure from the DNR's long-standing application of state mining law."

The Court of Appeals ruled that the DNR erred when it declined to order a trial-like proceeding before a neutral administrative law judge known as a "contested case hearing" to gather more information on the potential environmental impacts from the mine. So the court sent PolyMet's permit to mine and two dam safety permits back to the agency with an order to hold the potentially lengthy proceeding before deciding whether to reissue the permits.

But PolyMet contends it has proven the project's safety by navigating the most comprehensive environmental review and permitting process in Minnesota history. It says the project between Babbitt and Hoyt Lakes in northeastern Minnesota will create nearly 360 long-term jobs.

At issue in the DNR and PolyMet appeals is how to properly interpret a state statute that governs when the agency should order contested case hearings, and how much discretion it has to determine when they are or aren't required.

The DNR said in its announcement that it's not questioning the value of contested case hearings when they would help the agency to resolve a disputed issue of fact.

"However, in this case, we believe the DNR thoroughly considered all of the disputed factual issues, produced substantial findings documenting the basis of our conclusions, and appropriately concluded that holding a hearing would not resolve these disputes," the agency said.

PolyMet's attorneys wrote in their petition that if the Court of Appeals' decision stands, "permitting and environmental review throughout the state will become less predictable and more burdensome."

Cherry said in a January statement that the appeals court "effectively opened the door to an unpredictable loop of review and additional litigation."

If the Minnesota Supreme Court decides to hear the case, the justices would lay out a schedule for filing briefs and holding oral arguments. They could also let the Court of Appeals decision stand.

Separately, the company's national pollutant discharge elimination system, or NPDES, permit, which regulates water discharged from industrial activities, remains on hold after an August order by the Minnesota Court of Appeals after it was revealed the MPCA requested the Environmental Protection Agency refrain from commenting on a PolyMet draft water permit until the public comment period ended.

Top executive retires

While PolyMet’s permits go through the court system, one of its top executives announced he will retire in July.

PolyMet Executive Vice President Brad Moore, who served as commissioner of the Minnesota Pollution Control Agency for two years under former Gov. Tim Pawlenty, joined PolyMet in 2011 and guided the project through its environmental review. He will retire July 12, PolyMet said in a news release.

His position will not immediately be filled, and other executives and senior management will take over his duties, the company said. Moore will stay on as a part-time consultant on environmental and permitting matters and governmental affairs.

“My PolyMet experience has been personally and professionally rewarding; I am so pleased with the work our team has accomplished,” Moore said in the release. “It has truly been a once-in-a-lifetime opportunity. I look forward to continuing our relationship and seeing Minnesota’s first copper-nickel mine built and operational.”

Cherry said Moore’s leadership helped guide the project to become the first permitted copper-nickel mine in Minnesota.

“We are deeply indebted to Brad for his leadership and outstanding contributions in guiding us through this process,” Cherry said. ”We are pleased that he has agreed to continue his support of the company through ongoing consulting on environmental and permitting matters as well as governmental affairs on a part-time basis.”

Forum News Service and The Associated Press contributed to this report.

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