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State hires firm to figure PolyMet insurance fund

 

State hires firm to figure PolyMet insurance fund

By John Myers Today at 12:45 a.m.

http://www.duluthnewstribune.com/business/3996694-state-hires-firm-figure-polymet-insurance-fund

 

Minnesota will stick with a local consulting company to help figure out how much money PolyMet will have to set aside as financial assurance against any long-term treatment or disaster at its proposed copper mine.

The Department of Natural Resources has signed a contract with Oakdale, Minn.-based Emmons Olivier Resources Inc. to help the agency develop the financial assurance portion of the permit to mine that PolyMet is expected to apply for in coming weeks.

DNR officials announced the contract Monday saying the firm was picked by a state review panel that also includes the Pollution Control Agency, state Board of Investment, governor’s office, an outside law firm the DNR has contracted with on the issue, as well as private experts on mining and financial analysis.

Emmons Oliver Resources “is a nationally recognized group of environmental and design professionals,” the DNR noted. Emmons Oliver also will bring in subcontractors Spectrum Engineering and JLT Specialty USA.

Spectrum is a Montana-based mining, engineering, reclamation and permitting consulting firm that has worked on reclamation of thousands of mines/abandoned mines, including large open-pit metal mines. JLT is considered a global leader on insurance, reinsurance and surety bonds related to the mining industry.

The DNR’s permit to mine will specify both a dollar amount — expected to be tens if not hundreds of millions of dollars — as well as the type of financing requirements that PolyMet must set aside to cover any unexpected problems as well as planned long-term treatment of water leaving the site and money for rehabilitation of the mine.

If the project eventually passes state and federal environmental approval, receives some 22 permits from state and federal agencies and survives any litigation by opponents of the mine, the amount in the financial assurance fund will ramp up as PolyMet unearths the mine and begins using a processing facility.

State officials say they want to make sure that money is sufficient and readily accessible by the state even if PolyMet, its parent companies or successor companies fold, declare bankruptcy or walk away from the project at any time.

The DNR has said there will be both a public comment period on the permit to mine, including the issue of financial assurance.

PolyMet is proposing Minnesota’s first copper operation, with an open-pit mine not far from Babbitt and a processing facility at the site of the former LTV Steel Mining Co. site near Hoyt Lakes. The operations would employ about 300 people for about 20 years. Supporters say the project will help diversify the Iron Range economy, while critics say it could cause pollution that will damage the St. Louis River watershed that flows into Lake Superior.

 

 

Reader’s View: PolyMet a project of which Minnesotans can be proud

*Jeremy M. Fryberger is chairman of Hallett Dock Co.

Minnesota’s mining industry has, over the decades, provided livelihoods for hundreds of thousands of Iron Range residents. Mining is the economic base for thriving business communities and provided the economic structure for the development of Duluth and northern Minnesota. It all began with the opening of our iron ranges, Vermilion in 1884 and Mesabi in 1892.

So it is no surprise there is considerable interest in PolyMet’s project to develop Minnesota’s first nonferrous (copper-nickel) mine near Hoyt Lakes (“DNR deems PolyMet review ‘adequate,’ ” March 4). During 11 years of PolyMet responsibly addressing environmental and processing challenges, we have watched this project’s gradual development from:

  • Infancy, during the initial phase of drilling to define the extent of mineral reserves to the
  • Design of mine, power, rail and other project infrastructure to a
  • Decade of unprecedented, in-depth, responsible research of the mining process to ensure the protection of air and water from possible toxic wastes, and to, finally,
  • The enlightened, visionary and responsible collaboration of regulatory agencies, namely the U.S. Environmental Protection Agency, U.S. Army Corps of Engineers, U.S. Forest Service, and Minnesota Department of Natural Resources in the development and final approval of a Final Environmental Impact Statement.

Continuing the rich heritage of Minnesota’s mining industry, a major contributor of America’s industrial growth and national security, this project should be a point of pride for Minnesotans. After more than a decade of persevering effort and after expenditures in excess of

$250 million to develop environmentally responsible mining and processing practices, PolyMet will, arguably, be the benchmark of copper-nickel mining, not only in Minnesota but in North America, providing the minerals so necessary to produce the technological advances in support of our nation’s ever-increasing standard of living while providing the jobs and taxes to support our Iron Range communities.

 

Consistency is critical in Minnesota’s decisionmaking on mining

Abrupt change in regulatory process for Twin Metals could set troubling precedent.

The dark suits and flashy rings and the long line of limousines (https://ultimatetowncar.com/orlando-limo.php) ferrying Antofagasta executives during their 2010 Minnesota visit did not inspire confidence that their Chilean mining conglomerate should be entrusted to mine next to the state’s beloved Boundary Waters Canoe Area Wilderness.

Nevertheless, the frustration mining proponents have expressed over the regulatory roundhouse dealt to Antofagasta’s Minnesota project — the Twin Metals copper-nickel mine — is understandable. Just days after PolyMet, the state’s first copper-nickel proposal, cleared a key environmental hurdle, decisions made by Gov. Mark Dayton and the U.S. Bureau of Land Management have resulted in Twin Metals suddenly following a very different rule book.

The abrupt change ought to trouble Minnesotans both for and against mining. The reason: It raises serious questions about whether the mine review process is sufficiently insulated from politics.

Controversy has long simmered in Minnesota over copper mining. The industry could help revive the economically depressed Iron Range. But it has an abysmal record of leaving behind environmental disasters for taxpayers to clean up, though mining companies argue that new technology mitigates the risk of acidic runoff. The passions on both sides make it especially important to have a consistent, science-based regulatory framework.

Unlike with PolyMet, which just had its environmental-impact statement deemed “adequate” after a decadelong, state-driven review, Twin Metals’ fate could well be decided in Washington, D.C., by the Bureau of Land Management (BLM). Officials there are considering whether to renew Twin Metals’ leases on thousands of acres of federal land. This is usually a routine process, but a recent BLM ruling declared that the agency didn’t have to automatically renew the leases — a sign that officials may be weighing a protective zone on federal land around the BWCA.

Recent actions by Dayton and his administration also have suddenly shifted the regulatory landscape for Twin Metals. In late February, he made a personal call to the BLM’s director to object to mining so close to the federally protected wilderness. In addition, Dayton’s Department of Natural Resources threw up another unexpected hurdle for Twin Metals when the agency blocked a long-term agreement sought by the firm to secure broader access to state land for exploration activity.

These are serious setbacks for Twin Metals, which is why a well-connected environmental group led by Becky Rom, a former Faegre and Benson lawyer now living in Ely, Minn., has been targeting government land leases for years.

While environmentalists may be cheering these developments, Minnesota is best served by a robust copper-mining review process that doesn’t radically change from one proposal to the next. Dayton’s involvement also raises the disturbing possibility that a future governor with pro-mining views could intervene in a way that benefits industry to the detriment of the environment.

The Star Tribune Editorial Board has long held serious doubts that copper mining can be done responsibly at the Twin Metals site. Unlike PolyMet, Twin Metals is inside the BWCA watershed. At the same time, Minnesotans should have faith that the current science-based environmental-review process involving multiple state and federal agencies will yield the right answer in a transparent manner. Doing an end-run around this process, even for a worthy cause, sets a troubling precedent.

Counterpoint: Don’t knock PolyMet’s environmental review

By Dave Lislegard  MARCH 11, 2016 — 6:26PM (Star Tribune)

It’s painstakingly thorough with 10 years, 90,000 hours of work.

The commentary “4 tough questions on PolyMet copper-nickel mine” (March 10) attempts to paint the picture that the state’s recent signoff of the environmental review for the proposed PolyMet mine was ill-informed. Anyone reading it might question whether the Department of Natural Resources and the federal agencies involved have the environmental concerns of Minnesota in mind.

As a lifelong Iron Ranger and a sitting city council member in a community near the proposed mine, I have watched this process closely and with as much environmental concern as anyone. As someone who lives in the area, I can say confidently that the state and federal agencies involved have done their job.

With more than 10 years spent working through the environmental review process, adding up to more than 90,000 hours of work, it is clear that every step of the review process has been painstakingly adhered to. The result is a decision by the state that the PolyMet project meets all of our state laws and regulations. That’s an achievement worth celebrating.

These laws and regulations include standards that assure clean and safe water, air and land. The permitting process also requires state-managed and annually adjusted bankruptcy-proof financial assurance before permits can be issued, and the state can deny or revoke a permit if a company does not comply.

These constant attempts by urban mining opponents to create doubt where none exists are frustrating and disheartening to my northern Minnesota friends and neighbors. We and all Minnesotans count on our laws and regulations to protect us and the environment, while at the same time allowing opportunity for economic development and job creation. If projects meet state and federal requirements, they should be allowed to proceed. They should not be delayed at the expense of people waiting for the opportunity to work.

Projects like PolyMet are crucial for our communities and the future of the Iron Range. Northern Minnesota needs a diverse economy that builds on our mining history and provides well-paying jobs for our residents.

We need leaders and organizations across the state to recognize our serious economic situation and our desire for progress and prosperity, but not at the expense of the environment.

The state’s adequacy decision on the final environmental-impact statement demonstrates that PolyMet should move forward now through the permitting process and — if all requirements are met — into operation.

We have mined successfully on the Range for more than 100 years. We know how to mine, and we’ve learned how to do it and protect the environment. We live here. It’s our backyard. No one has a more vested interest in protecting the environment and mining responsibly than we do.

Dave Lislegard is a member of the City Council in Aurora, Minn

Schafer: Why is state only now taking action on Twin Metals mine?

By LEE SCHAFER  March 9, 2016 — 11:48PM (Star Tribune)

The state’s governor may not have killed the proposed Twin Metals copper, nickel and precious metals mine project in northeastern Minnesota, when he said this week that he doesn’t like the environmental risks.

But he sure wounded it.

It’s all about where the project is, not even 10 miles from Ely, the jumping off point for the Boundary Waters Canoe Area Wilderness. It’s simply too close to the BWCA, Gov. Mark Dayton reasoned, to have the worrisome risks of sulfide mining.

Of course, that proximity to a wilderness area was well understood back in 2006, when two state agencies decided to loan money to one of the exploratory companies, called Franconia Minerals, working on what became Twin Metals Minnesota.

It was well understood in 2005 when a Canadian company called Wallbridge Mining spun off a separate company to work on what became the Twin Metals project.

The canoe area wilderness was well marked on the maps in 2001, too. That’s when Wallbridge had gone ahead with its investments in the area.

This decision on the part of the state’s political leadership to not allow sulfide mining next to a wilderness area may be justified, but it sure would’ve been nice to have had that policy in place before miners put in thousands of hours of work and invested hundreds of millions of dollars.

The governor’s staff declined to discuss his decision beyond what was in his letter to the company, which explained that he had directed the state not to enter into any more access agreements or leases for the project.

His letter pointed out that he also told the federal Bureau of Land Management of his “strong opposition” to mining there, and this week the Department of the Interior released a little bombshell of its own. As it turned out, the department’s solicitor wrote, the company doesn’t have the automatic right to renew leases with the BLM, leases that go back all the way to 1966.

This Twin Metals news likely took the mining industry by surprise, as what’s been getting all the attention lately is the permitting process for PolyMet Mining, another so-called “junior” mining operation.

There are a lot of differences between what PolyMet is working on and the Twin Metals project, starting with the fact that PolyMet’s proposed operation is at the southwest end of the chain of copper, nickel and platinum group ore deposits miners hope to dig up. That puts it far closer to the heart to the traditional iron mining of the Iron Range.

The water at the PolyMet site flows southeast toward Lake Superior. At the Twin Metals site, it flows toward the BWCA.

Polluted water is a legitimate worry with copper and nickel mining, as bringing up the sulfide ore that contains the metals brings it into contact with water, forming sulfuric acid that in turn dissolves other minerals into the water.

What Twin Metals had in mind, of course, was a mining operation that would keep the toxins out of the lakes and streams of the BWCA.

Given the headlines over the last few years related to PolyMet and now Twin Metals, Minnesotans might be surprised to learn that the idea of mining here goes back more than 60 years. It took two junior mining companies to pick up the idea and try to make it a reality.

Both became publicly held corporations and in neither case did their investors make huge gains. And here’s where the state of Minnesota’s involvement in the project gets interesting, because one of the stockholders that ended up losing money in this deal was the state of Minnesota.

Like a lot of economic development projects, this one takes a little bit of explaining. It started when the Iron Range Resources and Rehabilitation Board and the state’s Department of Employment and Economic Development decided to loan Franconia Minerals money in 2006 to help develop its operation.

The loan was paid off when Franconia merged in 2011 into the other little company working in the area, Duluth Metals, and that’s when the state agencies decided to exercise their stock warrants, a form of option, related to the loan. In a burst of optimism for the future of mining, they actually bought stock in Duluth Metals.

The state agencies ended up losing, together, more than $500,000 on their stock deal, according to an analysis in the Duluth News Tribune.

These agencies did about as well as other investors. Duluth Metals did what it could to keep its project moving forward, but it eventually sought a partner and ended up with the big Chilean firm Antofagasta holding a minority stake in its main ore deposit.

 In late 2014, with the global commodities markets sliding and the odds of getting to the finish line getting longer, Duluth Metals agreed to be acquired by Antofagasta for $.45 (in Canadian dollars) per share, well below the initial public offering price from nearly 10 years ago.

In its short history, Duluth Metals had invested $189 million in its mining projects, based on its last published balance sheet before its sale to the Chilean firm was announced.

At 45 cents a share, it could be said that at least the public shareholders got out of a dead project alive, although as of this writing it’s not clear the governor’s action has killed the project. If the BLM decides not to renew leases, however, that could be the end.

Antofagasta was reviewing the situation and wouldn’t have anything to say about the governor or the BLM this week, according to a spokesman for its Minnesota unit.

It’s important to note that Antofagasta is a multibillion dollar company. It has financial staying power and it now has, according to its spokesman, about $350 million already sunk into this deal. It is unlikely to leave the state quietly.

 The biggest unanswered question isn’t what the company is going to do, though, it’s why the governor took action now on a project that’s been in the works for years.

Maybe an equally valid question is why the mining industry took the political risk. These junior miners have been trying to get a copper mine operating here for years, scrambling for capital to keep going and all the while not knowing if mining for copper and nickel would ever be permitted.

One thing’s for sure, of course. No mining company in this state will ever take that kind of risk again.

Minnesota DNR: PolyMet’s EIS is adequate

By RON BROCHU  Updated Mar 4, 2016 (Business North)

PolyMet’s proposed copper-nickel-precious metals mining project advanced a step further Thursday when the Minnesota Department of Natural Resources (DNR) said the company’s final Environmental Impact Statement (EIS) meets requirements.

“The state’s decision validates both the Final EIS and the exhaustive process supporting the final document. This is an historic event for Minnesota, the Iron Range, and for PolyMet, clearing the path for permit applications required for construction,” PolyMet President and CEO Jon Cherry said in a written statement. “The EIS demonstrates and confirms that the NorthMet Project can be built and operated in accordance with state and federal regulations. We intend to continue to build trust through open dialogue and community involvement as we advance through permitting into construction and operations.”

The DNR’s determination, however, does not mean the company’s “NorthMet” project has been fully approved, nor may it proceed yet to construction. PolyMet must first obtain air, water and mining permits from the state of Minnesota. The company also must obtain wetlands permits from the Army Corps of Engineers. That process will begin by spring, said PolyMet Vice President of Corporate Communications Bruce Richardson.

It will be monitored closely by environmentalists, who fear the prospect of extracting sulfide ores. They argue that runoff from those ores produce sulfuric acid that pollutes water for hundreds of years if the materials are not handled properly.

PolyMet has committed to build a reverse osmosis water treatment plant. Within the mining permit, the company also is required to provide financial assurances that guarantee environmental standards are met during and after the project’s life. Opponents, however, suggest Minnesota regulators frequently provide exemptions to mining companies. They intend to continue their fight.

“This decision just marks the beginning of the real debate. It doesn’t mean that PolyMet is a done deal, and it definitely doesn’t mean it has been ‘approved,’” Aaron Klemz, advocacy director for Friends of the Boundary Waters Wilderness, said in a Friday letter to members.

In an 85-page document, the DNR said the Final EIS addresses potentially significant issues and alternatives that have been raised. The department said it has responded to substantive comments received during the draft EIS and supplemental draft EIS involving issues of concern.

Through mid-December, the company had spent more than $98 million on environmental review and permitting, and the process is not over. In addition to submitting permit applications, PolyMet must develop definitive cost estimates and provide a project update.

“Minnesota’s process is long and cumbersome but assures the public’s participation,” said State Rep. Tom Anzelc, DFL-Balsam Township.

Additionally, the publicly traded firm must obtain construction financing. Construction and the ramp-up to commercial production is anticipated to take approximately two years. In its most recent quarterly report, PolyMet said it was in discussions with commercial banks and other financial institutions.

“There’s certainly more steps ahead, but this is an extremely important, giant, step,” said Frank Ongaro, executive director of Mining Minnesota, an industry association that advocates for the sustainable and environmentally responsible mining of copper, nickel and precious metals. Thursday’s decision, he added, is “important to PolyMet, to the industry and will create opportunities for working men and women and the state of Minnetota. This shows the system is working. We have a comprehensive, transparent system. It has taken a long time, but Polymet has demonstrated it has a solid project that can meet strict state standards and do it in an environmentally responsible manner.”

If further approvals are obtained, PolyMet intends to mine in the Duluth Complex near Hoyt Lakes. Mineral processing will occur about six miles away in the former Erie LTV plant, which is being repurposed for the project.

“NorthMet will produce metals that are essential building-blocks of renewable energy and the modern economy,” Cherry said. The clean energy applications he referred to include windmills, which typically need 10,000 pounds of copper, and hybrid motor vehicles, which need twice as much copper as standard cars and trucks. In terms of generating electricity, solar panels need twice as much copper per watt as windmills.

“Our focus remains on building the project in a manner that respects the things that matter most – supporting a safe and healthy community and protecting the environment – while generating returns to investors and creating good, well-paid, local jobs,” Cherry said.

According to Mining Minnesota, the Duluth Complex contains the world’s second largest copper deposit, the third largest nickel deposit and the second largest platinum-group metals deposit.

Precious minerals also are evident elsewhere in Northeastern Minnesota, and several other companies are interested in exploring the region for potential future mining. They include Twin Metals Minnesota, Kennecott, Vermillion Gold, Encampment Minerals, AngloGold Ashanti Ltd. and Teck American Inc.

“This decision sends a message to the global investment community that Minnesota welcomes their interest,” Ongaro said. “It’s an important message to investors around the world.”

But it won’t happen overnight, he noted.

“This is a culmination of decades of studies and permit simulations,” Ongaro said, referring to the overall development of responsible nonferrous minerals mining in Minnesota.

The U.S. Forest Service is reviewing comments on a related matter. PolyMet seeks to exchange some of its own parcels for USFS land in order to gain a title to surface rights above areas on which it has mineral leases.

The mines and processing facilities could generate $515 million per year, according to a University of Minnesota Duluth study. It says the company could directly support more than 300 full time jobs plus spinoff positions. Subsequent developments will generate a similar amount of employment.

Anzelc said he hopes the review process will accelerate in the future.

“I give Gov. (Mark) Dayton a lot of credit for the work he has already done to streamline the permitting process. But 10 years of review for a project that creates 300 jobs is just too long. I will continue to work with Gov. Dayton to bring sensible reforms to the permitting process,” Anzelc said.

Permitting a go!

DNR Ruling Gives PolyMet Thumbs-Up

Posted: Thursday, March 3, 2016 9:41 pm (Mesabi Daily News)

ST. PAUL — Let the permitting begin! And most likely the lawsuits, too.

The Minnesota Department of Natural Resources on Thursday ruled that the Final Environmental Impact Statement for PolyMet’s NorthMet copper/nickel/precious metals mine project near Hoyt Lakes is adequate, which paves the way for permit application by the company.

The environmental review process is now complete for the first-ever nonferrous mine in Minnesota. Now it’s all about permitting.

DNR Commissioner Tom Landwehr said the process leading to the completion of the state’s EIS has been deliberative and thorough.

“The environmental review process is about describing the potential environmental effects of the proposed NorthMet project,” Landwehr said Thursday afternoon. “We are confident this document has thoroughly examined the important environmental topics and has addressed them.”

The company has already spent more than $90 million for more than 10 years of environmental review.

PolyMet officials said they plan to submit permit applications shortly after today’s adequacy determination. Landwehr said his department has yet to receive any such applications.

A firm timetable for permitting, construction and plant startup would be speculative because about 20 state and federal permits must be secured.

“It will be 18 to 24 months of construction time from the last permit,” PolyMet CEO Jon Cherry said in a telephone interview with the Mesabi Daily News Thursday afternoon.

“This has been a long time coming. We couldn’t be more pleased. It’s been more than 10 years of hard and diligent work by a lot of people.”

Cherry said, “Our focus remains on building the project in a manner that respects the things that matter most — supporting a safe and healthy community and protecting the environment — while generating returns to investors and creating good, well-paid, local jobs,”

The project will create 360 permanent jobs, hundreds more in spin-off positions and 2 million hours of construction.

The determination of adequacy will now also likely trigger lawsuits filed by environmental groups. Litigation would be against the State of Minnesota, and the Gov. Mark Dayton administration has already hired a law firm for potential lawsuits.

In addition, the Legislature reportedly may be asked to approve millions of dollars this session for the state’s legal costs on the issue.

While PolyMet Mining has little control over the time needed for state and federal agencies to process and finalize permits, it is anticipated — given current progress — the company could be producing concentrates containing copper, nickel, cobalt and precious metals in late 2018, according to the company’s website.

Landwehr addressed the controversial nature of the project and concerns of opponents, but said, “I am quite comfortable that if done as planned there will not be significant impacts.”

But his boss, Gov. Mark Dayton, said he remains “genuinely undecided” on the final decision of whether the mine will ultimately be allowed.

That raised hopes of anti-PolyMet environmentalists, who did not have a good day on Thursday.

“We’re glad to see Gov. Dayton saying he’s going to take a hard look. We’re disappointed that the DNR did not address the issues it should have addressed,” said Aaron Klemz, spokesman for Friends of the Boundary Waters Wilderness.

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The DNR decision was met by strong words of support by Iron Range political and business leaders.

Environmental groups were not pleased.

“I am pleased to see the Minnesota DNR deem the Final Environmental Impact Statement (FEIS) adequate. This is an important step for a project that will bring hundreds of good jobs to our region while sustaining the integrity of our rivers, lakes and land,” Nolan said.

“Today’s decision is a major win for the Iron Range. With hundreds of miners laid off due to the illegal dumping of millions of tons of foreign government subsidized steel into our marketplace, we need this project now more than ever,” said 8th District U.S. Rep, Rick Nolan.

“PolyMet has made it clear from the very beginning that they are absolutely committed to support and comply with every rule, regulation and financial guarantee the process requires to protect our water, air and land. Make no mistake — the monitoring and enforcement process will be vigorous.”

“The State of Minnesota should be proud today to recognize the promise of economic opportunity this project brings to our communities,” said Harry Melander, president of the Minnesota Building and Construction Trades Council.

“I’m thrilled to celebrate this milestone. The PolyMet project will usher in a new era of mining that will create millions of construction work hours in a region of our state that is hurting and in need of good paying jobs.”

“The EIS adequacy is true affirmation from top regulating authorities that PolyMet can be done safely, can be permitted and that the agencies will stand by their decision,” said Al Hodnik, ALLETE chairman, president and CEO, who is also a PolyMet Board member.

“A clean energy economy and society in general needs these minerals. It is red letter day and I am pleased for the many people who have supported this project and what it means for the Iron Range, Minnesota and our country.”

A statement by executive directors of the Laurentian, Hibbing and Grand Rapids chambers of commerce praised the determination of adequacy.

“A future of modern and responsible mining on the Range is something that we all look forward to as the next phase of opportunity for those of us who have built our lives here. PolyMet represents that future, and we remain hopeful that it will soon become reality,” said Bernie Collins of the Laurentian chamber, Lory Fedo of the Hibbing chamber and Bud Stone of the Grand Rapids chamber.

“Today validates our belief in the process and that we can have both jobs while also protecting the environment. We can do it the right way,” said Aurora City Councilor Dave Lislegard, who traveled to St. Paul Thursday for the DNR announcement.

“I’m very confident we will see shovels breaking ground to get this project up and running. This is a big step, albeit it took a while to get here,” said state Rep. Jason Metsa, DFL-Virginia.

Frank Ongaro, executive director of MiningMinnesota, an advocacy group for non-ferrous mining, praised the DNR’s decision.

“This is a good day for the working men and women or the Iron Range and in the state of Minnesota. It demonstrates that the system is working. It may not work quickly, but it is working.

“PolyMet has a sound project to meet Minnesota’s strict standards. It’s also important to the global investment community,” Ongaro said.

But a spokesman for an environmental group tried to refute what the exhaustive DNR process found.

“This project cannot be permitted. It violates state water quality standards. It violates the [federal] Clean Water Act,” said Paula Maccabee, an attorney for WaterLegacy, one of several group working together to fight the project.

How exhaustive was the DNR effort? The agency put in 90,000 hours of staff time on the 3,500-page document, which included 58,000 public comments on the Supplemental Draft Environmental Impact Statement and 30,000 comments on the Final Environmental Impact Statement.

“The PolyMet decision of adequacy was great news. For those of us on the Range who have had to watch friends and neighbors get laid off and have to fight tooth and nail for their unemployment benefits — this is a very welcome moment. A breath of fresh air. Good news we’ve been waiting for,” said state Sen. David Tomassoni, DFL-Chisholm.

“I’m glad the DNR and the citizens of Minnesota have produced a thorough Environmental Impact Statements it means we can move forward with the permitting process knowing the state did its due diligence to vet this project.” State Rep. Tom Anzelc, DFL-Balsam Lake, said the permitting process has to be more streamlined.

“I give Gov. Dayton a lot of credit for the work he has already done to streamline the permitting process. But 10 years of review for a project that creates 300 jobs is just too long. I will continue to work with Gov. Dayton to bring sensible reforms to the permitting process,” he said.

“I fully support the PolyMet project and applaud the DNR for reaching this conclusion today. The environmental review process on PolyMet has been the longest in state history. More than 90,000 hours of staff time has made this one of the most scrutinized mining projects in the country,”said Rep. Rob Ecklund, DFL-International Falls.

Mining exploration leases approved by Minnesota Executive Council

Three mining companies looking for gold, silver, copper and other valuable metals in northern Minnesota were awarded exclusive rights to prospect on state-owned tracts thanks to action by top state officials Wednesday.

The state’s Executive Council voted 4-1 to approve the so-called minerals lease bids by the companies for 43 tracts totaling 16,348 acres under which the state Department of Natural Resources holds the mineral rights.

The companies submitted bids in November for areas where they believe valuable minerals might be located and where they may (or may not) conduct prospecting, such as seismic testing or even drilling to sample minerals in rock far below the surface.

In exchange for small annual lease payments, the winning bidder for each tract gets exclusive rights to explore on the land for up to 50 years, as long as they keep paying and keep looking. If mining ever occurs, the companies must also pay royalty fees to the state.

The bids were approved earlier by the DNR but also must be approved by the Executive Council, which includes Gov. Mark Dayton, Lt. Gov. Tina Smith, Attorney General Lori Swanson, State Auditor Rebecca Otto and Secretary of State Steve Simon.

Otto, who raised concerns about the state’s long-term financial risk and the DNR’s conflicting dual roles of promoting and regulating mining, was the only dissenting vote.

Most of the land leased, 11,628 acres, is in Koochiching County where Colorado-based AngloGold Ashanti is looking for gold.

Arizona-based Kennecott, a subsidiary of global mining giant Rio Tinto, bid on three tracts totaling 1,440 acres in Aitkin County near the company’s so-called Tamarack project where geologists have found a deposit of apparently high-quality copper.

Atlanta-based Encampment Minerals bid on seven units in St. Louis County totaling 3,280 acres.

Minneapolis-based Vermilion Gold had bid on four parcels totaling 1,388 acres in Itasca County but pulled its bids and the leases were not awarded.

No bids were made on 130 other tracts the DNR offered last year on an additional 71,000 acres of land in Aitkin, Carlton, Itasca, St. Louis and Kanabec counties.

Several environmental activists testified at Wednesday’s council meeting, focusing on the scope of mining exploration and the lack of public input.

The DNR has opened up lands for potential mining “from Lake of the Woods to the North Shore and from Mille Lacs to the Boundary Waters,” said Paula Maccabee, attorney for Water Legacy, after the meeting. “It’s true that most of these won’t actually see drilling. But we are leaving that decision up to the mining companies — based on what they find or whether they have enough money — without any community discussion on where mining should and shouldn’t occur in northern Minnesota.”

The DNR notes that buying the right to explore for minerals is far from actual mining or even test drilling. Only about 2.4 percent of the mineral lease sites ever see any actual test drilling. So far, none have been mined. Before a state-owned parcel can be mined, the leaseholder must comply with all legal requirements for environmental review and permitting.

Most of the tracts leased for exploration are for mineral rights under state-owned school trust fund or tax-forfeited land, although 31 parcels are owned by private citizens. DNR officials said all of them have been notified of the mining exploration leases.

Dayton urged opponents to meet with DNR mining officials to discuss their concerns “and we’re certainly willing to do that,” said Jess Richards, director of the DNR’s Lands and Minerals Division.

This was the DNR’s 34th nonferrous mineral lease since the program began in 1966.

“We have held them about every year or every other year, except during” the state’s copper mining moratorium in the 1970s and ’80s, Richards said.

The DNR says the companies are looking for nonferrous (non-iron) minerals such as copper, nickel, platinum, palladium, gold, silver, cobalt, chromium, zinc, lead, bismuth, tin, tungsten, tantalum and niobium.