State considers tougher copper-nickel mining rules

PolyMet processing site
PolyMet Corporation purchased key processing equipment once used to process taconite by LTV Mining Corp. The large building in the foreground is the crushing facility where ore will be ground before metals can be extracted.
Photo courtesy PolyMet Corporation

Back in 1992, the state set up rules for a kind of mining that's never been done on any large scale in Minnesota -- copper-nickel mining, sometimes called sulfide mining.

The copper, nickel, and other valuable minerals are found in sulfide rock. When that rock is brought to the surface, a chemical reaction occurs that produces sulfuric acid.

Other states have experienced serious water pollution after sulfide mines are closed, and in some cases the mining companies have walked away without paying for the cleanup.

On Wednesday, the Senate Environment and Natural Resources Committee will discuss a bill that would tighten the rules on copper-nickel mines.

Rep. Alice Hausman, DFL-St. Paul, is one of the sponsors of a similar bill in the House that would tighten the 1992 rules -- specifically the rules on something called financial assurance. "One of the ways of course that companies have escaped paying for the damage is they declare bankruptcy," she said.

"The more you see the damage across the country and the more you see how they've sometimes evaded responsibility, it shapes how you package the financial assurance mechanism."

Financial assurance is a requirement that the company have money set aside to cover environmental work after the mine closes.

The bill's authors say there are worrisome gaps in the current rules. The bill doesn't specify a dollar amount, but it would tighten the rules in various ways.

Currently, the financial assurance question only comes up well along in the process -- after the environmental review is done and the state begins issuing permits.

Scott Strand from the Minnesota Center for Environmental Advocacy said financial guarantees on closure should be discussed during the environmental review, when there's plenty of opportunity for public comment. That way, he said, there is time to resolve disputes up front.

"When you keep those kinds of decisions, those critical decisions to the public's interest away from public until the end of the process, you just increase the odds that the only way you'll get these issues resolved is to go to the courthouse, have it resolved in litigation," he said.

Strand admits the public can comment during during permitting, but he says by that time the state has pretty much committed itself to letting the project go forward.

Marty Vadis, lands and minerals director for the Minnesota Department of Natural Resources, said generally projects are allowed to proceed after all the time and energy invested in the Environmental Impact Statement, or EIS. But Vadis said there is not enough information in the EIS to figure out how much money is needed for financial assurance.

"For example, the EIS might say that a water treatment plant is needed, but it wouldn't say how large a plant is needed or what are the constituents that need to be removed from the water, or how much water is being treated," Vadis said.

That level of detail only comes in permitting the mine, he said.

The bill also includes language specifying the types of financial mechanisms that would be acceptable; cash, notes or U.S. government bonds, for example. The assurance money would have to be deposited with a bank or trust company approved by the commissioner of Minnesota Management and Budget. The DNR prefers the more flexible rules that are now in place.

For its part, Polymet, the company that wants to mine copper and nickel on the eastern edge of the Iron Range, said the current rules will work fine. Spokeswoman LaTisha Gietzen said it would be unfair to change them at this point.

"We've been working through this process, and having the rules change this far into it is just an attempt to try to delay our project," Gietzen said.

Not so, say the bill's backers, who say they want things to be as clear as possible up front, to avoid ending up in court -- which could delay the project even more.

If the bill passes in the Senate Environment Committee Wednesday night, it will be heard in two more committees before it goes to the floor. A bill has yet to be heard in the House.

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