An award-winning paper written by University of Minnesota students for a business ethics class argues that PolyMet Mining should not be allowed to proceed with its proposed copper-nickel mine in northeastern Minnesota at this time.

The paper will have little or no bearing on the emotional, political, economic and other considerations that go into a final decision by state regulators and Gov. Mark Dayton.

But give credit to these bright students who turned the issue into a business-ethics case study, and to Securian Financial, which sponsored the competition and provided volunteer judges.

About 600 freshmen in the Carlson School of Management participated in the competition. Slightly more than half of the student teams came down against the mining project, largely because of environmental risks that could be quantified. Those risks were balanced against benefits that include an estimated 20 years of mining by the Canadian company and related jobs on the Mesabi Iron Range.

Prof. Jeffrey Kaufmann, who taught the class, said what’s impressive is that 18- and 19-year olds stripped out the emotions and applied a relatively sophisticated process for analyzing an ethically difficult situation.

“One of our problems in business and politics is that we focus too much on where we stand on an issue and too little time on understanding the issue,” Kaufmann said. “As [student] Kevin Hyde was saying … the [winning] group’s collective gut started with the idea that the PolyMet proposal was ethical. It changed as they focused on understanding the issues and the claims.”

The students behind the winning essay put themselves in the role of the outside directors of the company. And they analyzed the situation not just in terms of profits to shareholders, but for overall impact on a variety of stakeholders, including environmental liability.

Securian General Counsel Gary Christensen and his team of judges evaluated the papers of the 11 finalists. And Securian gave each of the six members on the winning team a $1,000 scholarship.

“The debate and teamwork involved in analyzing a real business problem help prepare students to be better leaders and contributors in the workplace and society,” said Lori Koutsky, Securian manager of community relations.

MiriamHadidi, a 19-year-old business student from Shoreview, at the outset was the only member of the winning team to doubt the PolyMet plan.

But her teammate Hyde said after analysis: “We concluded it was wrong at this time. It would have to involve a new form of mining [to negate the impact on area streams and lakes].”

Over their heads?

Bruce Richardson, a PolyMet executive, commended the students for their effort but said in an interview that they were in over their heads.

A 2,200-page environmental review spells out the risks and the benefits, Richardson said.

“These students got a small taste and had something to say. But the real questions have been answered. Mining has been going on for 100 years or more and written into state policy to diversify state resources. It’s really like asking if we should grow corn in Minnesota.’’

Richardson said the mining decision is not a jobs-versus-environment question.

“There is a process established in law to identify and determine whether we can obtain these mineral resources responsibly,’’ he said. “The question is should they be mined in Minnesota, a place of strong environmental responsibility and accountability to stakeholders, or leave the mining to somewhere else in the world where regulations are lax?”

The Iron Range has a rich history of mining activity, and the Duluth Complex currently contains a globally significant accumulation of nickel and copper and platinum-group metals, according to PolyMet.

The mine could reap an estimated $10 billion in revenue over 20 years. However, the winning essay found that the economic gains could be offset by environmental damage from mine drainage, sulfuric acid and toxic metals, in addition to a decrease in lake home real estate values that could follow these hazards.

“Similar sulfide mines all across the world have yielded severe and long-lasting contamination in the area around the mines,” the essay reported. “PolyMet’s proposed mine, however, is an even larger concern than past mines because the mine and processing facility would be located on the St. Louis River basin,” which connects miles of wetlands, floodplains and lakes in the region.

The student essay raised concerns about PolyMet’s commitment to environmental containment and remediation, given the history of a mining industry that often has left messes to be cleaned up at taxpayer expense.

Besides, the students concluded, as outside directors they have a higher obligation to the tourism industry, Minnesota environmental law and the next generation.

In March, after four years and $22 million, PolyMet cleared a major hurdle when the EPA gave the project’s plans a passing grade, with reservations and requests for more analysis.

The state is still working on an environmental study that could push a decision into next year.