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“The [financial] model is much more sensitive to the operating costs than it is to the replacement capital costs” of assets like new water treatment plants, said David Chambers, who heads a Montana-based nonprofit that advises public interest and environmental groups on technical mining questions.
If operating a water treatment facility costs $1 million a year, the financial assurance for PolyMet should be easily manageable, he said. “But if that operating cost got up to $10 million a year, that is pushing $1 billion to pay for that. That’s why at PolyMet it becomes an issue.”
Attorney Kathryn Hoffman of the Minnesota Center for Environmental Advocacy explained that environmental groups have repeatedly questioned the DNR on why far more detailed financial assurance analysis wasn’t made part of this big study on the environmental impact of the mining operation.
The DNR’s Richards said the public needs to be a little more patient. His agency has plans to hire at least one if not more consultants to help evaluate PolyMet’s proposed financial assurance plan when the company applies for a permit to mine.
“We recognize, too, that fundamentally, financial assurance is one of the most important parts of the discussion for PolyMet,” Richards said.
That’s certainly a fair statement, and for outsiders like Chambers the more that’s eventually disclosed about the assumptions and analysis PolyMet is using, the better.
As a fourth-grade math teacher might say, PolyMet can’t just write down the answer. It has to show its work.
“I don’t think it’s a bad place to mine,” Chambers said of the PolyMet site. “But if you are going to do it, you need to do it right.”
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