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Polymet Mining Corp., facing further environmental scrutiny of a proposed copper-nickel mine near Hoyt Lakes, Minn., said Friday it remains committed to the $600 million project despite uncertainty about its approval.

The company endorsed a plan, announced a day earlier by state and federal agencies, to conduct a supplemental environmental review of the proposed mine. The review will respond to the U.S. Environmental Protection Agency's February finding that a draft study led by the Minnesota Department of Natural Resources was flawed.

The mine, once projected to be in operation by 2011, poses greater environmental risk than iron ore mining because the tailings generate acid. Environmental groups have fought the mine, saying the long-term environmental damage isn't worth the 400 mining jobs it would bring to the Iron Range.

Neither the company nor the DNR would predict how much additional time is needed to try to address the environmental concerns. Ralph Augustin, a program manager for the U.S. Army Corps of Engineers, the federal lead agency for the environmental study, said the additional work isn't likely to be completed this year.

He said Polymet may need to propose other ways to cope with acid-leaching mine tailings, which are a primary concern of the EPA. He also said a review of a land exchange, involving 6,700 acres owned by the U.S. Forest Service, is being folded into the study, further complicating the timing.

"We can't tell how long each step should take...that is why everybody is reluctant to give you a time frame," Augustin said.

In February, the EPA declared the three-year draft environmental study to be inadequate and "environmentally unsatisfactory." The agency expressed concern about groundwater and surface water contamination, the loss of 1,000 acres of wetlands and the lack of financial arrangements for environmental controls after the mine closes.

Betsy Daub, policy director of the Friends of the Boundary Waters Wilderness, a group that opposes the mine, said the supplemental study could take another two years. She said only 3 percent of environmental studies reviewed by EPA receive an unsatisfactory rating.

As the DNR and Corps resume the review, the EPA and the Forest Service will play a bigger role. That is seen as a plus by Polymet, which said their participation offers "an effective and efficient path forward to completion of the environmental review."

The mine, expected to operate at least 20 years, would process ore at the former LTV Steel Mining Co. Erie Plant after its conversion to refine copper, nickel and precious metals. Polymet, a publicly trade company based in British Columbia, has no other mines. Glencore, a private Swiss mining company, has helped finance the Minnesota mine project and has an equity stake in Polymet.

Polymet Chief Financial Officer Douglas Newby said the company has spent more than $25 million on the environmental studies so far. He said the company has drawn on about half of the $50 million in financing from Glencore. Those debentures come due in September 2011, but Newby said Glencore has been a supporter of the project and understands the timeframes on environmental review and permitting.

Polymet's stock has dropped 50 percent this year, and closed Friday at $1.55.

David Shaffer • 612-673-7090