PolyMet Mining Corp.'s long-planned copper-nickel mine on the Iron Range is getting another boost from mining giant Glencore, which will loan the company $30 million.
The loan will allow PolyMet to continue operating through 2015 as it tries to get regulatory approval and start building the mine. The company spends about $2.5 million a month.
PolyMet signaled in December the new financing was likely and, on Monday, the two companies announced the terms for the $30 million loan facility. PolyMet drew the first portion of the loan over the weekend.
Glencore, a Swiss commodity trading and mining company, has already sunk about $134 million in loans and equity investment in PolyMet and holds a minority stake in the firm.
St. Paul-based PolyMet proposes building a large open-pit mine near Hoyt Lakes and a full-scale water treatment plant.
It also will rehabilitate the ore-crushing mill that was the former site of the LTV Steel taconite plant in Hoyt Lakes. Once finished, the mill will crush rock shipped in from the Mesabi Iron Range near Babbitt and partly extract copper, nickel, platinum, palladium, cobalt and gold.
"Our focus continues to be completion of permitting, construction finance and project implementation," said Jon Cherry, PolyMet's CEO. "The environmental review and permitting process continues to track in line with the schedule outlined by the commissioners of the Department of Natural Resources and the Pollution Control Agency last fall."
PolyMet's plans have faced setbacks due to a lengthy environmental review process and concerns from environmentalists. Groups such as Conservation Minnesota, the Minnesota Center for Environmental Advocacy and others have long considered PolyMet's plan risky. To extract copper and nickel and other metals, ore must be crushed, which exposes hidden sulfur inside the rock, they say.
The worry is that the mountains of crushed ore that are left behind after mining and milling would create sulfuric acid, which can leach mercury, arsenic and other heavy metals into groundwater, rivers and lakes. If contaminated, the damage can last for decades even after a mining pit and plant have closed, environmentalists say.
Environmental watchdog groups and Minnesota American Indian tribes have raised alarms about the project. However, it has the support of mining advocates and the Iron Range Resources and Rehabilitation Board. Those in favor of the project point out that it will create about 300 jobs that will last more than 20 years.