Ex-BP chief now flashpoint in Iron Range mine fight

Opponents question Tony Hayward's potential influence on a northern Minnesota copper mine venture.

In his life after the oil spill, Tony Hayward, vilified former chief executive of BP, has suddenly appeared as a spectre in the contentious fight over the proposed PolyMet copper mine in Hoyt Lakes, on Minnesota's Iron Range.

Hayward, who left BP a year ago, has joined the board of Glencore, the multinational commodities corporation that owns 18 percent of PolyMet Mining Corp. As a board member, his responsibilities include advising management on environmental, health and safety issues, according to Glencore's website.

This week, former DFL legislator Frank Moe used Hayward's connection to Glencore to stir up the mining controversy. In a long e-mail to legislators, Gov. Mark Dayton and state environmental officials, he detailed what he said was Glencore's "tragic environmental and human rights record," a characterization a Glencore spokesman said was inaccurate. Moe described Hayward as "the disgraced BP CEO who presided over the largest oil spill in U.S. history."

Hayward drew criticism for underestimating the scope and impact of the Deepwater Horizon explosion and oil spill, often playing down BP's role in the disaster that killed 11 workers and spread oil from New Orleans to the Florida coast. His gaffes alienated officials and Gulf Coast residents. His most famous, uttered in the midst of the crisis, was, "You know, I'd like my life back."

His position at Glencore "gets your attention," said Moe, who is a wilderness guide in northern Minnesota and is on the board of the political arm of Conservation Minnesota, an environmental nonprofit. "It says, who are these people?"

Mining opponents say that question is critical. The state is facing one of the most important environmental choices in its history: whether or not to open up northern lakes and forests to hard-rock mining. The companies and executives who may play a hand in that are crucial, they say.

To have Tony Hayward "leading the way sends chills down my spine," said Nancy Gibson, founder of Ely's International Wolf Center and a board member of Conservation Minnesota's political arm.

Doug Newby, chief financial officer for PolyMet, said the makeup of Glencore's board is not relevant to PolyMet or to the proposed $600 million open-pit copper-nickel mine in northern Minnesota. Glencore invested $90 million in PolyMet for its minority share. That could grow to 25 percent, and Glencore has also agreed to buy all of the products the mine would produce, he said. But there are no plans for its ownership position to grow into a majority share, he said.

"They are not involved in the management of the company and certainly won't be involved in setting environmental or safety policies," he said. PolyMet will comply with every state and federal law, and abide by all environmental regulations, he said.

Hayward was appointed to the Glencore board several months ago, in the wake of the giant commodities company's transition from private to publicly held through an $11 billion stock offering earlier this year.

The change has opened up Glencore, once viewed as highly secretive, to greater scrutiny. It was mired in controversy when founded in 1974 by commodities broker Marc Rich, who fled to Switzerland after being charged by U.S. authorities with selling oil to Iran during the 1979-81 hostage crisis.

After Rich left Glencore in the mid-1990s, it rapidly grew into one of the world's largest -- and lowest-profile -- companies. It develops, trades and processes commodities, minerals, oil and agricultural products on every continent.

It's encountered its fair share of controversies, and has been the target of reports and investigations by European nonprofits, some of which Moe detailed in his e-mail.

Glencore's subsidiary, Mopani Copper Mines in Zambia, "has ignored" environmental rules and routinely has sulfur dioxide emissions over 70 times the legal limit, Moe said.

Glencore spokesman Simon Buerk said those emissions occurred before Glencore acquired the mine. It's invested more than $2 billion in the property, significantly reducing sulfur dioxide emissions, and has agreed with the Zambian government to eliminate them altogether by 2015.

However, Glencore also has been embroiled in financial controversy in connection with the mine, which Moe described as "massive fraud and tax evasion accusations." In May, the European Investment Bank suspended all lending to Glencore, citing "serious concerns" with its governance. The bank is investigating a $50 million loan it made to Glencore for pollution equipment at the Zambian mine, but said its concerns "go far beyond" that investment.

At the time, Glencore said it welcomed the inquiry and expected to be exonerated. On Thursday, Buerk said "we have repeatedly set the record straight on these allegations, which are based on a flawed study which the Zambian government has publicly described as incomplete. Mopani's accounts have been audited ... every year and always given a clean bill of health," he said.

PolyMet is awaiting the results of a state and federal environmental impact statement before it applies to the state for a permit to dig the mine. The environmental report is expected to be completed this year, but has been delayed several times. The permitting process, which would provide the regulatory framework for the mine's operation, could also take months to complete.

Josephine Marcotty • 612-673-7394

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