Ramsey County judge sets rules for inquiry on disputed PolyMet permit

One of three separate inquiries into a disputed water permit for PolyMet Mining Corp. got underway in a St. Paul courtroom Wednesday, where a Ramsey County judge ruled that environmental groups challenging the permit can conduct "limited" discovery to question state regulators and request documents.

At issue is whether Minnesota pollution regulators violated procedural rules as they approved the permit in negotiation with their counterparts at the U.S. Environmental Protection Agency (EPA).

The findings could determine the fate of the permit. If the court determines there were "irregularities" serious enough to compel a new or revised water quality permit, it could spell delays for PolyMet's proposed $1 billion mine and processing plant — which would be the state's first copper-nickel mine.

PolyMet spokesman Bruce Richardson said Wednesday that the company continues to line up project financing, "and at this time, we do not anticipate any significant project delays."

It's an unusual case — not a conventional lawsuit but rather a proceeding ordered by the Minnesota Court of Appeals "for the limited purpose of an evidentiary hearing and determination of the alleged irregularities in procedure."

A coalition of Minnesota environmental groups and the Fond du Lac Band of Lake Superior Chippewa have alleged that significant concerns about the water permit raised by EPA officials were kept out of the official record, and that a Minnesota regulator instructed the EPA not to submit written comments during the public comment period.

Lawyers for PolyMet and the Minnesota Pollution Control Agency emphasized the word "limited" in the Appeals Court instructions. They asked Ramsey County District Judge John Guthmann not to allow additional discovery, which includes gathering evidence through interviews and document requests, for instance, and can take many months.

In the end, Guthmann opted for limited written discovery, on a rapid timetable. "If some sort of fact-finding is not allowed, it essentially means there is a substantial risk that the hearing process will be useless," Guthmann said. "That offends my own notion of due process."

Guthmann said both sides will be allowed to submit 25 written questions to the other side and request 25 documents. Both sides have one week to object to the questions. After any objections are resolved, the parties have 30 days to answer the questions.

A date for the evidentiary hearing will be set after the questions are answered.

Separately on Wednesday, the state Department of Natural Resources (DNR) denied a request by a similar coalition of mine opponents to reconsider the permits it approved for PolyMet's tailings dam, where mining waste would be stored.

In a news release, DNR Commissioner Sarah Strommen said her agency has confidence in its original analysis of PolyMet's proposed tailings dam and that it carefully considered recent dam failures such as the catastrophic failure of Vale SA's Córrego do Feijão mine-waste dam in Brazil.

While both the PolyMet and the failed dam in Brazil are "upstream" designs, PolyMet's is "significantly" safer, she said.

According to the DNR: the PolyMet dam was much more thoroughly assessed for stability under severe conditions such as extreme rainfall and an earthquake; the PolyMet site is much flatter and its dam wall will not be as steep; and the PolyMet dam will have "virtually no inflow" of water, whereas the Brazil dam has "significant" runoff from surrounding hillsides; and there's little or no seismic activity in northeast Minnesota.

Finally, the PolyMet dam is about 8 miles from the site of the open-pit mine where blasting will occur, whereas it appears mine blasting was occurring close to the dam in Brazil when it failed.

The DNR also rejected criticism that it had used the same engineer, Scott Olson, who helped assess the Brazilian tailings dam before it collapsed; the agency said Olson's method was used improperly in Brazil but was used correctly and carefully reviewed in Minnesota.

The environmental groups have also challenged PolyMet's dam safety permit at the Minnesota Court of Appeals. That challenge is ongoing.