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PolyMet’s $650 million project would create about 360 jobs for the duration of its 20-year-mine, plus spinoff jobs. In addition to an open pit mine, the project would include a metallurgical processing plant that would extract small amounts of precious metals from tons of rock.
The metals are in high demand for computers, smartphones, wind turbines and many other technologies related to green energy.
But unlike iron ore deposits, the sulfide-bearing waste rock produces acid when exposed to air, which leaches heavy metals, changes the acidity of surface waters and damages fish and other aquatic life. Hard rock mines have a long history of significant environmental damage that can last for many decades, and have cost taxpayers billions of dollars in clean up costs.
PolyMet officials and other mining experts say that new processes, engineering techniques and stringent environmental oversight will protect Minnesota’s waters as well as taxpayers. The 500-year plan to run millions of gallons of water a day through expensive reverse osmosis plants is one such example of what’s feasible — and required — to remove pollutants in the runoff that comes from tailings basins and waste rock piles.
Old taconite plant is key
The key to the project’s financial success, however, is the old taconite processing plant that was once used to crush 100,000 tons of iron ore per day, said Atwell. PolyMet acquired the plant, 6 miles by railroad from its proposed open pit mine, from the bankrupt Erie Mining Company. It plans to use about a third of the machines but could quickly ramp up to 90,000 tons per day at little or no additional cost, Atwell said.
And that’s where the money is.
“There is real value in using the whole capacity of the mill,” Atwell said. Assuming that the permitting is completed by the end of 2014, as the company’s management predicts, and that it also succeeds in acquiring the necessary financing, the added capacity could eventually bring the stock up to $3 or $4 per share from Tuesday’s close of $1.23, he said.
PolyMet could either expand its mining operation by digging more ore per day, a process that could take a year or two of regulatory review, he said. Or, when other mines develop in the area, they could send their ore to PolyMet’s facilities, which “government regulators may encourage,” in order to minimize the mining footprint in the region, the report said. But that, Atwell added, could take five or seven years.
Either way, by being first mining company out of the box and as owner of the processing plant, PolyMet “will be in the driver’s seat,” he said.
Josephine Marcotty • 612 673 7394