In review: ‘PolyMet is the precedent’

In this photo taken Feb. 10, 2016, binders of the final environmental statement for the proposed PolyMet mine sit on a table at the company headquarters in Hoyt Lakes, Minn. The Department of Natural Resources announced Thursday, March 3, 2016, that it has approved the final environmental review for Minnesota's first copper-nickel mine.

IRON RANGE — As the dust settles from the Minnesota Court Appeals ruling Monday on three major PolyMet permits for a planned copper-nickel mine, the potential implications of the decision are becoming clear.

Most compelling involve the order to review the entirety of the permit to mine and two dam safety permits through a contested case hearing process, rather than using a trial setting to address specific questions raised in the appeal by several environmental groups.

That differentiation underscores the seriousness of the appeals court’s action in a case that — long high profile and contentious in nature — is now in unprecedented territory. No mining project has ever faced a contested case hearing in the state of Minnesota, much less involving a project that just a year ago was fully permitted with sights set on construction this year.

Now, three critical permits could very well be on the line, in a process that could span more than a calendar year, even if the parties successfully push it to the Minnesota Supreme Court.

“It exposes the entire administrative record of those permits, probably something like a million pages,” said a source with knowledge of the impact, who spoke on the condition of anonymity because they were not authorized to discuss the ruling.

The ripple effect of the appeals court decision could have reverberations beyond just PolyMet.

If it’s appealed to the state Supreme Court, and upheld, the ruling would essentially turn traditional thinking about how permits are issued on its head. The way the process is setup now, an environmental review process goes through the agencies, who vet the facts of a project and provide a thorough set of information to decide on the permit, and for the commissioner to decide if a contested case hearing is necessary.

The appellate judges, in this case, are potentially saying the current process is no longer appropriate.

“It’s kind of troubling because we think the EIS gives them the information for a decision,” said a source with knowledge of the PolyMet litigation, who was not authorized to speak directly about the case. They were referring to the Environmental Impact Statement. “This says maybe you can’t depend on that.”

The far-reaching impacts could come as other industries and projects make their way through environmental review, notably including the proposed Twin Metals underground copper-nickel mine near the Boundary Waters.

“We have a lot of independent review going on, and I think if you add all that up, the question becomes, ‘Do our current mining laws work in the copper-nickel context?’” said DFL House Majority Leader Ryan Winkler during an interview Friday, when asked about the pipeline of litigation facing PolyMet. “We’re going to find out if there’s issues … PolyMet is the precedent, and a lot of other projects are going to follow that.”

PolyMet, its supporters and the Minnesota Department of Natural Resources are still evaluating the ruling as they consider an appeal to the state’s top court, but the potentially precedent-setting nature of it was not lost on them.

Jobs for Minnesotans, a group of business, community and labor leaders that support the project, called it a setback and noted that “litigation is now an expected part of the regulatory review process.”

DNR officials took that a step further, saying that while the appeals court did not question the validity of the studies, its opinion “has implications not only for this project, but for the role of contested case hearings in the state’s permitting framework more broadly.”

Weighing time and an appeal

What the DNR and PolyMet must now weigh is time. A contested case hearing could take up to 18 months, but more complex ones can run longer. And appealing to the Minnesota Supreme Court is not a quick process in itself.

Both the state agency and company have 30 days to file an appeal, but the Supreme Court isn’t obligated to take the case. Justices have 90 days after the appeal is filed to accept and place it on the docket, and it could be another year before it’s heard.

So, for now, the project is in wait-and-see mode.

Officials at PolyMet said Monday they were “reviewing the decision and exploring all of our options, including filing a petition for review to the Minnesota Supreme Court.”

Forgoing a hearing in the top court isn’t unprecedented. In July 2019, Enbridge and the Minnesota Public Utilities Commission opted to waive an appeal of its Lake Superior Watershed modeling after an unfavorable Court of Appeals ruling, citing a shorter timeline to redo the models.

Appealing to the Supreme Court comes with its own risk. If the high court affirms the appeals court’s opinion, the project goes back to square one with the contested case hearing. If the justices overrule their appellate counterparts, PolyMet’s permits will be returned while the other litigation continues.

There’s belief among PolyMet supporters that if the case is appealed, it sets enough precedent for the Supreme Court to take it on. Supporters have reached out to Minnesota Gov. Tim Walz to support the agency’s finding. The governor’s office said in an email they are reviewing the ruling with the DNR.

What is a contested-case hearing?

In short, it’s similar to a trial. There will be experts, testimony, cross examination and an administrative law judge considering the entirety of the arguments. The difference from a traditional trial is that the judge does not make a final ruling, and instead offers findings and recommendations to the agency commissioner.

DNR Commissioner Sarah Strommen, in this case, is not obligated to take up the judge’s suggestions. Once the hearing is concluded and recommendations issued, she can choose to alter, deny or approve the permits, but that decision is subject to judicial review.

“There’s a lot of uncertainty on what’s next,” said an industry source, who spoke to the Mesabi Daily News on background. “That’s the elephant in the room. We certainly hope it doesn’t go back to zero.”

A hearing will consider the entirety of the three permits including documents from the environmental review, environmental impact statement and supplemental EIS — essentially over a decade of scientific study on the NorthMet mine.

The industry source added that while the hearing is broad in nature, the DNR could choose to narrow its arguments down to the factual issues raised by environmental groups in their previous request for a contested case hearing. Those include whether: an upstream construction of the tailings basin dam is unsafe; the tailings basin’s use of a bentonite line would actually work; there is a better alternative to the planned “wet closure” tailings basin; the financial assurance meant to reclaim the site when PolyMet closes, either as planned or unexpectedly, is sufficient; Glencore, PolyMet’s majority shareholder, should be added to PolyMet’s permit to mine.

“If it isn’t narrowly defined, it does a huge disservice to the DNR and the project,” the industry source added.

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