PolyMet nears permit process

Posted: Thursday, February 25, 2016 9:15 pm (Mesabi Daily News)

ST. PAUL — A decision on the determination of adequacy for the PolyMet copper/nickel/precious metals project near Hoyt Lakes will be released by the end of next week, Gov. Mark Dayton said on Thursday.

The announcement will be made by the Department of Natural Resources, which is one of the co-lead agencies on the project.

The DNR posted the PolyMet Final Environmental Impact Statement in early November. DNR Commissioner Tom Landwehr said at the time that the FEIS wouldn’t have been posted if it wasn’t adequate.

Gov. Dayton and DFL leaders, including Senate Majority Leader Tom Bakk of Cook, all responded with a “no” when asked by an editor whether they have been lobbied by any anti-PolyMet supporters to push legislation this session that would delay the nonferrous project.

The PolyMet project, which would create 350 permanent positions, hundreds more spin-off jobs and more than 2 million hours of construction, has received more than 10 years of environmental review.

Other co-lead agencies are the U.S. Army Corps of Engineers and the U.S. Forest Service. The U.S. Environmental Protection Agency and three Minnesota Chippewa bands have participated as cooperating agencies. The Minnesota Pollution Control Agency has also been actively involved.

Governor Dayton is just plain wrong to link Twin Metals request to PolyMet

National view: Slow permitting devastating US mining, manufacturing

Imagine if significant gold deposits were found in northern Minnesota. That would be a boon for Minnesota mining, since gold is in great demand for use in such diverse products as smartphones and solar panels.

But what if it took 10 years for a mining firm to get the approvals needed to start extracting this gold? Imagine the disappointment in terms of lost job opportunities and lost tax revenue.

It’s not a far-fetched possibility, however, to expect a lengthy process before Minnesota could possibly enjoy any newfound gold wealth. Delays in mine permitting, like those experienced with PolyMet’s attempts to open a copper-nickel mine, can pose hefty bureaucratic challenges for even the most valuable mining projects.

Minnesota already has seen its share of mining jobs lost due to subsidized global competition. The idling of taconite mines on the Iron Range is, in part, due to China’s dumping of steel on the world market. Not only has China chosen to dump product in an effort to boost exports, but it continues to prop up its steel industry with massive energy subsidies that are actionable under world trade law.

In essence, this points to a larger problem. Unlike Beijing, Washington fails to understand just how important manufacturing and mining are as key wealth-generating industries. What Washington urgently needs to do is overhaul both trade policies and cumbersome regulations that hinder domestic manufacturing and, by extension, America’s mining sector.

The voters get it. The American people already understand that unless the United States maintains a strong and diverse manufacturing base, the nation’s overall economic standing will suffer. And so it’s doubly concerning to realize that, despite a popular trend toward “Made in America” in recent years, America’s mining problems only seem to be growing. And they’re now impinging on the viability of U.S. factories.

Longstanding permitting delays, like those facing the PolyMet project, are forcing America’s manufacturers to depend more and more on imported metals and minerals. Specifically, the United States is now completely import-

dependent for 19 key minerals and more than 50 percent dependent for another

24 important minerals.

It wasn’t always this way. As recently as 1990, the United States led the world in metals and mineral production. But now America ranks seventh and relies on roughly $27 billion worth of imported minerals each year.

Unfortunately, some in Washington may not fully understand the importance of mineral production. We need to remind our elected officials that metals like copper, gold, platinum and silver comprise some of the key components in the very smartphones and laptop computers they use every day.

America’s factory owners already are very aware of this growing dependence on imported resources. In a 2014 survey, more than 90 percent of U.S. manufacturing executives said they’re concerned about obtaining the minerals they need when they need them.

Here’s the real stunner, however: America possesses great mineral wealth and holds an estimated $6.2 trillion in mineral reserves.

So how is it that, despite this natural abundance, less than half of the minerals consumed by America’s manufacturers are actually sourced domestically? Well, the problem when it comes to extracting new minerals is, you guessed it, a bureaucratic one. Specifically, it now takes as much as seven to 10 years — or longer — for a U.S. mining operation to successfully navigate the permitting process needed to launch new operations.

A decade of permitting delays can eliminate half of a mining project’s value before production even begins.

In contrast, mine permitting in countries like Australia and Canada, which maintain environmental standards comparable to those of the United States, takes only two to three years.

If America’s manufacturers are to remain competitive, they’ll need more timely access to reliable mineral sources. This is particularly apparent when one considers that many of the nation’s existing mines are reaching the ends of their useful lives. And it’s why Washington urgently needs to overhaul the outdated permitting process that continues to hamper domestic mining operations.

Thankfully, Congress is catching on. The House of Representatives repeatedly has passed legislation to make the permitting process smarter and more efficient. Now the U.S. Senate finally is considering similar legislation.

An engaged Washington, and one that truly values domestic manufacturing, needs to give America’s mineral miners a fair shake. Otherwise, the cost of inaction will lead to a greater dependence on imported metals. And that’s simply bad business for American manufacturing.

Kevin Kearns is president of the Washington, D.C.-based U.S. Business and Industry Council, a national business organization that advocates for U.S. manufacturers.

Views from the mining industry

Is PolyMet a big deal?

“Polymet will be creating the same economic impact as having the Super Bowl in Northeastern Minnesota every year for 24 years. They estimate when the Super Bowl comes to Minnesota (in two years), it’s going to be a half-a-billion-dollar, a 500-million-dollar, benefit to the state of Minnesota. That’s what PolyMet is going to do, plus (more), each and every year for 24 years. Let’s start there. Let’s look at the economic opportunity and then let’s go from there.”

How can government help?

“The biggest thing government can do from the perspective of getting new projects up and going is make some decisions. We have a strong regulatory process in place, you have environmental-review laws, you have clean water acts, you’ve got all these environmental agencies, the Department of Interior, Department of Agriculture, the U.S. Forest Service and everything in between. And you have all of these agencies tripping over each other, not necessarily the right hand knowing what the left hand is doing, and they need to do a better job of coordinating, cooperating, and knowing who’s making the decisions and finalizing decisions.”

Will mining be safe?

“The system is in place. The system is working. Any company that comes forward has to demonstrate they can meet Minnesota’s strict air- and water-quality standards or they won’t move forward. … There are strong standards in place. Companies have to demonstrate they’re going to meet those standards, and that’s the only way they’re going to be allowed to operate.”

With a down global market for metals, can PolyMet be profitable?

“Right now, even with the low copper prices, any company that’s moving forward sees the opportunity of profitability. … Right now the answer is yes, these companies can still be profitable and the opportunities (are there) for significant return on investment. (The market) will rebound in the future because the demand is not going to go down. We’re not going to stop buying cellphones and laptops and driving cars and building wind turbines and the like. So, yes, these companies can be and will still be profitable and will move forward.”

Frank Ongaro of Duluth is executive director of Mining Minnesota, which advocates for the environmentally responsible mining of copper, nickel and other precious metals. His comments here were made at a chamber-hosted and News Tribune-sponsored forum Tuesday morning at Valentini’s Vicino Lago restaurant in Duluth.

We will survive this mining downturn, too

We’ve lived through this before. Survived it. And the challenges to Northeastern Minnesota now are similar to the challenges in 2001, the last time “we wondered if we were going to have an iron ore industry in the state of Minnesota,” as Frank Ongaro said at a chamber forum Tuesday in Duluth.

Then he was president of the Iron Mining Association. Now he’s executive director of Mining Minnesota, which advocates for the environmentally responsible mining of copper, nickel and other precious metals. He knows more than a thing or two about the industry, its incredible highs and its devastating lows.

“We’ve been interdependent — Duluth, Northeastern Minnesota and the Iron Range — for 100 years. (The mining industry) has had its ups and downs. It’ll continue to have its ups and downs. … (Right now) we’re at a bottom,” Ongaro said. “But be assured, we have had these cycles, and we will come out of this cycle at some point, at some level.”

To do so we’ll have to wait out low global commodities prices. And we’ll have to overcome steel dumping, as much a threat to the future of Minnesota mining in 2001 as it is now, Ongaro said. It’s illegal, but that doesn’t stop China, South Korea and other nations from subsidizing their steelmaking and from keeping their steelmaking costs down by snubbing environmental, human-rights, health, safety, child-labor, unemployment and other protections. Their cheaper-made steel simply squeezes the U.S. iron ore, taconite and steel industries out of the global market.

Clearly, tariffs aren’t strong enough and international trade laws and other measures aren’t being enforced with enough vigor to prevent the destruction of steel-

dumping. That includes laws that prohibit steel buyers, even those in the U.S., from acquiring illegally dumped steel.

Elected leaders have been trying to impress those challenges on

difference-makers from St. Paul to D.C. In December, White House Chief of Staff Denis McDonough visited the Iron Range to see the devastating effects of steel-dumping firsthand, but little if anything came of the visit. Closer to home, the Minnesota Legislature hasn’t even been able to be convinced of the need for a special session to extend unemployment benefits for laid-off Iron Range mining employees.

Still, “Give credit to our elected officials,” Ongaro said. “(They’re) trying to do everything they can to support the industry.”

What should the Minnesota Legislature accomplish this coming session to help? As it turns out, other than finally doing the humane thing by extending those unemployment benefits, not a thing, according to Ongaro.

“We’re telling the administration, we’re telling regional legislators, we’re telling state agencies that there’s absolutely nothing that we want or need from the 2016 legislative session other than leave the system alone,” he said. “It’s solid and strong. Regulatory processes are in place. It’s working. It takes way too long, but it’s open, it’s transparent, and there’s public participation. Let the system work.”

Beyond being slow, Minnesota’s tough

environmental-review process certainly seems to have been working with regard to PolyMet, the company proposing to open Minnesota’s first copper-nickel mine. Its plans have been reviewed for more than 10 years, including being sent back for changes and improvements that’ll better protect Minnesota waters and air. The company now is on the doorstep for permits that will allow it to begin operations.

“What a great opportunity for the entire state of Minnesota,” Ongaro said of PolyMet. “You talk about this region, you talk about economic development, there’s no single better economic development opportunity for this region of the state than PolyMet Mining: 300-plus jobs for 20-plus years. That’s a generation. That’s not short-term. That’s not a small amount of jobs. Plus, (there’ll be) another 600-plus spin-off jobs, as determined by the University of Minnesota. We’re talking a thousand jobs for this region for a substantial number of decades, and we’re talking about great, great-paying jobs for this region. … It’s a tremendous opportunity for this region and for all the vendors and suppliers, and not just in Northeastern Minnesota and not just in Duluth but from all across the state.”

It may not look like it right now — just as it didn’t in 2001 — but mining has a future in Minnesota, according to a guy who knows more than a thing or two about the peaks-and-valleys industry.

“There are going to continue to be opportunities,” Ongaro said, and mining in Minnesota “will be around for a long time.”