News

Capitol Reporter
November 30, 2009

Last February, State Rep. Alice Hausman introduced a bill that would have tightened regulations on all those mining companies that are lining up to extract copper, nickel and other metals from untapped reserves in northeastern Minnesota.

As the St. Paul DFLer tells it, the goal was simple: Protect Minnesotans from the sort of disastrous economic and environmental outcomes associated with nonferrous metal mining operations in other states and parts of the globe.

Hausman's bill faced opposition from Iron Range legislators, the Pawlenty administration, labor groups and mining interests. They complained that the bill amounted to a backdoor ban of an industry only now making its first inroads in Minnesota. In their view, it would have also effectively killed the prospect of hundreds of well-paying mining and construction jobs.

In the end, the Hausman measure fizzled when state Rep. Kent Eken, DFL-Twin Valley, chair of the Environment Policy and Oversight Committee, declined to give it a hearing.

Now comes Act Two.

This week, Hausman told Capital Report she will sponsor a revised version of the bill, either in mid-December or when the session resumes in February. "This is by no means a ban on nonferrous mining," said Hausman. "We just want to make sure it's done right."

While the details have not been settled, Hausman said some of the more controversial provisions from the prior iteration - including a rule that would have prohibited the issuance of a permit if it appeared a mine would require water treatment after the mine closed - would likely be scuttled.

The revised bill will focus on financial assurances designed to prevent companies from dodging cleanup obligations by way of bankruptcy or other sleight of hand, said Hausman.

Such a measure is a principle goal in Minnesota's environmental community, where regulation of nonferrous mining remains a hot issue. The Minnesota Environmental Partnership, a coalition of some 80 green groups in the state, lists safe-mining legislation as one of its four top legislative priorities.

"The current laws and regulations do not specify the types [of financial assurance] that are not permissible, so we need to tighten up some of those loopholes," said Betsy Daub, policy director for the Friends of the Boundary Waters, a MEP member.

Daub said she expected the revised bill would require mine operators to provide financial assurances in the form of a surety bond or other cash equivalent while forbidding unreliable instruments such as self-insurance and corporate guarantees.

"The state needs to be protected from the potential that a corporation might try to escape its liability for a cleanup," said Allison Wolf, legislative direct of Minnesota Center for Environmental Advocacy, another MEP member.

Historically, Wolf noted, states with nonferrous mining have chronically underestimated the expense of mine reclamations, often leaving taxpayers saddled with cleanup costs. "We'll also be talking to legislators about making sure that estimates of cleanup costs are both accurate and transparent," said Wolf.

Eken said he hasn't decided whether he would give a hearing to another mining regulation bill. "It depends on whether we reach some common ground agreements," he said.

"I know this is a volatile issue. You're talking about two things that are important, jobs and clean water," Eken added. "I'm hopeful we don't sacrifice one for the other."

Still, Eken said "there is some reason to be concerned" about the adequacy of existing financial-assurance regulations.

Frank Ongaro, executive director of the trade organization Mining Minnesota, said the push to alter the nonferrous mining regulations could "change the game in the latter innings." He pointed out that PolyMet Mining Inc., which has proposed an open-pit copper and nickel mine near Babbitt, has already spent some $20 million and five years on its environmental impact statement. (While other nonferrous mining proposals have been initiated in Minnesota, PolyMet is the closest to fruition.)

"Bottom line is, we have a project that is in the environmental review process. This would change the game," said Ongaro. "If it comes down to legislative priorities, I would hope that in the 2010 session, with our strong need for jobs, the Legislature would focus on ways to create jobs."

According to PolyMet, the mine at Babbitt - which would use a processing facility at the now-shuttered LTV Steel Mining Co. plant in Hoyt Lakes - is expected to employ some 400 people over the projected 30-year life span of the mine. Additionally, the mine would give work to several hundred construction workers.

Among Iron Range legislators, the job focus remains paramount, while skepticism persists about the necessity for any additional rules.

"I've been told by DNR and PCA that the existing financial assurance requirements are adequate. As legislators, we have to depend on our agencies," said state Sen. Tom Bakk, DFL-Cook, who is running for governor. "I'm not going to listen to the environmental groups or the mining companies about the assurances. I want to know that from our state agencies. That's their job to analyze."

According to state Rep. Tom Rukavina, DFL-Virginia, another gubernatorial hopeful from the Range, the issue shouldn't even be framed as a jobs versus the environment proposition.

"I'm not going to say this mine is going to be totally pollution-free. But I know it is going to more environmentally sound than anywhere else in the world those metals are mined," said Rukavina. "That's something people in the environmental community need to recognize."

The green economy - including everything from windmills to solar panels - relies on the types of metals PolyMet expects to mine in Minnesota, Rukavina added. But unlike copper mined in South America and processed in China, no highly polluting smelters would be employed in the processing of Minnesota copper.

"Every single candidate I'm running against is talking about green economy. They don't want to face the reality that none of that happens unless you have these materials," said Rukavina. "I say mine it right and mine it right here."

Even if the Minnesota Legislature does not act on financial-assurance regulations, there is still a possibility that the federal government may change the game, according to Betsy Daub of the Friends of the Boundary Waters.

"The EPA is really beginning to take a look at hard-rock mining financial assurance regulations, and it may be doing some rule making changes in the spring," she said.