Owner says none is planned, but environmentalists cite report about a mine triple in size.
David Hughes of PolyMet walked through a closed plant back in 2011 that his company now wants to resurrect so it can process copper. The old taconite plant would be brought back to life when, and if, PolyMet gets a state permit to drill for copper and nickel.
A controversial open pit copper mine proposed for northeast Minnesota could triple in size within five years, according to industry analysts who have studied the project, raising the economic and environmental stakes far beyond what its owner has discussed with state regulators.
If state officials approve the initial project late next year, the company is likely to seek a second mining permit from the state within six months because a larger operation would double or triple the value of PolyMet Mining’s stock, said Wayne Atwell, one of the analysts who wrote a report issued this week by Edison Investment Research. The report, commissioned by PolyMet, projects that daily ore production would increase from 32,000 to 90,000 tons per day.
“The real value is in getting that second project built,” Atwell said. “The economics are huge.”
People on both sides of the increasingly intense debate over copper mining in the state are gearing up for public hearings that will follow the Dec. 6 release of a state environmental review that critics say should include the implications of a larger mine. A spokesman for PolyMet said Tuesday that the company is not considering any future expansion, noting that it has its hands full just trying to get regulatory approval to produce 32,000 tons per day.
The company has said and there is enough copper and other precious metals on the site to feed possible future expansion, but it would require further drilling, engineering plans, environmental review and permitting, said Bruce Richardson, PolyMet’s vice president for communications and external affairs.
“That’s not part of our discussions around here,” he said.
But environmental groups and Minnesota Indian tribes said the report confirms their belief that the company is contemplating a much larger project than it has proposed to state regulators.
They said they’ve argued, unsuccessfully, that the potential impact of a larger project should be addressed in the state’s environmental review. The public, they said, has a right to know the true scope of the project, which even now calls for up to 500 years of water treatment that could ultimately cost billions of dollars.
“If we don’t know all the impacts, we can’t have an honest conversation about that,” said Kathryn Hoffman, an attorney with the Minnesota Center for Environmental Advocacy.
Atwell acknowledged that his predictions are “intelligent estimates,” and do not represent the company’s statements. Steve Parsons, a mining industry analyst with National Bank Financial in Toronto, said he thought that would be a very aggressive move for the company in a short time frame.
But Atwell, a mining industry analyst for 40 years, said he met with management, visited the site near Hoyt Lakes and used other publicly available documents to write the report as the launch of Edison’s coverage of the company’s stock. PolyMet is an investment client of the firm, and its managers provided Atwell guidance as well, he said.
“In my best judgment, I think that’s what will happen,” Atwell said. “We didn’t make this stuff up.”
Jobs, with risks
The Dec. 6 release of the environmental impact statement launches a critical part of the federally required public review of the mine, and forms the basis for planning and permitting next year. The public will have 90 days to comment on the environmental review, and the DNR expects to hold one or more public hearings as well.
Chris Niskanen, communications director for the Minnesota Department of Natural Resources, said the agency can review only the project that’s been presented by the company.
“If the company seeks to expand its processing, that expansion will be subject to additional environmental review,” he said.
PolyMet’s Northmet project, which has been in development since 2003, would be Minnesota’s first copper-nickel mine. There are several other companies lining up to tap into one of the world’s largest copper-nickel deposits that lies beneath the forests in northeast Minnesota — deposits that offer the promise of a new era of mining for Minnesota, but also come with significant ecological risks for one of the most scenic areas of the state.