A Minnesota company that began to build a frac sand processing plant in North Branch without the required air-quality permits will pay a $5,000 fine and work with state regulators to collect much-needed data on potential health hazards from sand dust.

An agreement between Tiller Corp. and the Minnesota Pollution Control Agency (PCA) to settle violations of state and federal permit laws will help Minnesota officials begin to assess for themselves how people who work and live around frac sand can be affected, if at all, by dangerous, respirable silica dust.

The state has virtually no data of its own on air quality around frac sand facilities because extensive mining of "fracking'' sand for oil drilling is new in the state and companies here aren't required to monitor the dust.

MPCA Compliance Coordinator Sarah Kilgriff, who worked on the settlement with Tiller, said she knows of only one other frac sand operation in the state, in Scott County, that has agreed to monitor ambient air for particulates and share the data with the government.

Airborne silica dust in certain industrial settings, such as glass-making plants, has been known to cause silicosis and cancer. But where frac sand facilities are concerned, there are no reliable studies to evaluate the risk that workers or people who live near mines and processing plants may face.

"This is a newer industry type and we just don't have data,'' Kilgriff said. "I think it was a really great way for the company to do something that will be good for the long term.''

The plan calls for monitoring particulate matter for at least two years inside the fence line of Tiller's 20-acre sand-drying plant in North Branch. Wet frac sand will be trucked in from Tiller's mine in Grantsburg, Wis., then dried, sorted and loaded out on rail cars.

Tiller spokesman Mike Caron said the plan was the company's idea to help address possible health hazards. "We know there's a lot of questions,'' he said.

Tiller ran afoul of the PCA for failing to obtain pre-construction permits related to air quality as affected by emissions from the plant's burners, electric generators and possible dust. Construction began in 2011 before Tiller filed a belated application in February 2012. Kilgriff and Caron said a mixup over the type of permit needed further delayed the process. Caron said Tiller hopes to finish construction, obtain the permit and start operating before spring 2013.

Tiller is also dealing with regulatory scrutiny in Wisconsin, where the state Department of Justice is investigating a serious frac sand spill into the St. Croix River last spring from stockpiles at the company's Grantsburg mine.

Tony Kennedy • 612-673-4213