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Minnesota Appeals Court Nixes Air Permit for Copper-Nickel Mine

Financial documents suggesting higher profits through unpermitted mine use should have been given more scrutiny, an appellate judge wrote.

ST. PAUL, Minn. (CN) — The Minnesota Court of Appeals issued yet another setback to a proposed copper-nickel mining project in the state’s northern Iron Range, ruling Monday that state regulators hadn’t adequately scrutinized one of the mine’s permit applications before granting it. 

The court found that the Minnesota Pollution Control Agency did not provide sufficient justification for its approval of an air-quality permit for PolyMet Mining’s NorthMet project, especially in light of financial documents in which the mining company speculated to shareholders about profits that could be realized by breaking the terms of its permit.

The court remanded the permit decision to the agency, instructing it to make additional findings and issue a revised decision with clearer explanations for its findings. 

“We accord an agency’s judgment calls much deference, particularly when those decisions call for expertise. Certainly, the technical permitting decisions here called for expertise. But with deference comes obligations,” Judge Lucinda Jesson wrote in the conclusion to the court’s opinion. Those obligations, she said, had not been met. 

PolyMet had applied for and received a “synthetic minor source” air quality permit under the federal Clean Air Act, promising to limit its ore processing to 32,000 tons a day in order to keep its annual emissions below 250 tons. Environmental groups including the Minnesota Center for Environmental Advocacy, however, pointed out that the company submitted a report to Canadian securities regulators shortly after the close of a public comment period for the permit in which it made financial projections for that plan as well as for scenarios in which the mine could process 59,000 and 118,000 tons daily. 

The MCEA submitted those documents to the MPCA, arguing that PolyMet’s own projections demonstrated that compliance would not be profitable and suggested that the company did not intend to stick to its permit requirements. The MPCA took no action on the MCEA’s requests for an additional Environmental Impact Statement or to stay the permits, and the organization launched its appeal.

The Minnesota Supreme Court found in February that the MPCA had no obligation to investigate sham permitting, but sent all other issues back to the Court of Appeals. 

The appellate panel consisting of Jesson, John Rodenberg and Edward Cleary – all appointees of Democratic former Governor Mark Dayton – found that even without investigating the risk of sham permitting, the documents and other evidence should have received more scrutiny from the MPCA.

"The agency did not make any reflective findings on whether PolyMet had failed to disclose relevant facts or knowingly submitted false or misleading information," Jesson wrote. "Nor did it directly address whether these new facts merited additional inquiry." A letter to the MCEA regarding the filings, she noted, addressed the issue "only in a conclusory fashion" and was not a part of the agency's decision.

It’s not the only legal battle facing the mine company. In April, the Minnesota Supreme Court reinstate two key permits for tailings basin dams, but the high court took issue with a permit to mine issued by the state’s Department of Natural Resources. That permit, Justice Natalie Hudson wrote, needed a hard expiration date. The use of an absorbent clay known as bentonite to seal the mine’s tailings basin was not outlined in sufficient detail, Hudson found, to be certain that it satisfies DNR rules. 

PolyMet was muted in its response to the latest ruling, but in a statement it stressed the ongoing need for the minerals it seeks to mine.

“We stand firmly in our belief that the Minnesota Pollution Control Agency appropriately accounted for the potential effects of the NorthMet Project and will expeditiously provide the supporting explanation requested by the court,” it said. “The facts and science that prove the project can meet air quality standards are not in doubt. Copper, nickel, palladium and cobalt are high demand metals for infrastructure projects and the production of electric vehicles and renewable and clean energy technologies including solar panels, wind turbines and batteries.”

The MCEA – which was joined in its appeal by fellow environmental groups the Sierra Club, Friends of the Boundary Waters Wilderness and the Center for Biological Diversity, along with the Cloquet-based Fond du Lac Band of Lake Superior Chippewa – made quick moves to praise and push forward from the decision. 

“Today’s decision is yet more confirmation that PolyMet is a failed proposal,” MCEA CEO Kathryn Hoffman said in a statement in which she also made reference to the state high court rejection and to the recent intervention of the Environmental Protection Agency into the Army Corps of Engineers’ permitting process in Wisconsin. “It’s time to move on from PolyMet and find better alternatives for northeastern Minnesota.” 

The organization launched a petition campaign Monday to urge Democratic Governor Tim Walz to “acknowledge that PolyMet has failed, and set a better course for northeastern Minnesota that respects all communities in the region.” 

The NorthMet project is one of two controversial proposed mines in the northern portion of Minnesota. Iron mining, once the center of the region’s economy, declined throughout the 20th century as high-grade ore reserves were depleted. Some mines from that era have survived on income from taconite, a lower-grade ore that requires more processing than natural ore. PolyMet’s proposed project joins another one, Twin Metals, in its objective of mining copper and nickel in the region for the first time. 

Mining proposals have underlined a Democratic schism in the historically deep-blue state. The Iron Range has historically been a stronghold for Minnesota’s Democratic-Farmer-Labor Party, in no small part because of the region’s deep-rooted organized labor traditions. That support has been declining in recent years, with union membership dipping nationwide and Republican Pete Stauber winning the state’s northeastern 8th Congressional District in 2018 and 2020. Election to two terms made Stauber the district’s longest-seated Republican congressman since 1947, three years after the DFL’s formation. 

That situation has led to a standoff with environmentalists in the DFL’s base, many of whom argue that mining and pipeline projects like the ongoing construction of Enbridge’s Line 3 pose threats to water quality but also to another of the area’s major economic drivers: tourism to its abundant lakes, rivers and streams, particularly the North Shore of Lake Superior and the popular wilderness known as the Boundary Waters.

Walz, a centrist Democrat with roots in rural southern Minnesota, has only rarely spoken on the issue, stopping short of a full-throated endorsement or condemnation of either mining project despite calls from both sides.

Categories / Appeals, Business, Environment, Government

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