Seeking copper, Canada's PolyMet offers Minnesota jobs and water pollution

ST. PAUL, Minn. — It was so 1970s to put a brown bear with a raised fist on a flyer for an anti-mining campaign in Minnesota's northern wilderness. "Remember," said the hand-drawn bear in all caps, "only you can stop copper-nickel mining!"

Minnesotans are sitting on one of the largest copper-nickel deposits in the world. Mining companies have known this since the 1940s. They've been exploring and buying up mineral rights ever since. The fruit of their labors? So far, nothing.

Instead, mining companies and their opponents have been engaged for more than six decades in a staring contest that continues today as executives of the Canadian mining company PolyMet watch from their St. Paul office suite, trying not to blink. PolyMet is closer than any such operation has ever been to mining copper and nickel in the state. Its proposed mine is the subject of an 1,800-page environmental-impact statement that the Minnesota Department of Natural Resources (DNR) will release today.

Actually it's a second draft. The U.S. Environmental Protection Agency rejected the first in 2010, saying the project "must not proceed as proposed." Citing the soon-to-be-published second, or "supplemental," draft, the Minneapolis Star Tribune reported in October that the PolyMet project, even in its revised form, "would generate water pollution for up to 500 years."

It's a staggering number, but it's not quite right. A copy of the document, obtained by Al Jazeera America in November, declares that treatment at the mine site after mining operations have ceased could be required not "up to" but rather "for a minimum of" 500 years. Either way, it's not difficult to grasp PolyMet’s primary PR challenge during the looming 90-day public-comment period.

PolyMet has spent $60 million so far on the environmental-review process for its proposed open-pit operation, an effort underwritten by the Swiss mining company Glencore, whose chairman, Tony Hayward, is no stranger to environmental-impact and PR challenges. He was the chief executive at BP forced to resign after the Deepwater Horizon oil spill in 2010.

PolyMet is asking Minnesota to approve a mine that promises jobs and an infusion of cash in a part of the state that struggles with unemployment and poverty. And it is asking state officials to approve an entirely new industry: the mining of copper, nickel and the precious metals that have formed alongside them. These are metals that modern technologies, including green technologies such as wind turbines or solar water heaters, require. Domestic production of these critical metals is regarded as a national-security issue. The market for them is well-established.

But when it comes to dealing with a half-millennia of water pollution in a part of the state that includes the Boundary Waters Canoe Area in the Superior National Forest, wild-rice waters (actively used by the state's Chippewa tribes) and rivers that drain into Lake Superior, Minnesotans are being asked to take a leap of faith.

"What we're seeing with the PolyMet proposal is kind of like their Match.com profile," says Betsy Daub, policy director for Friends of the Boundary Waters Wilderness. "They're going to put their best face forward, and their best face is 500 years of water pollution."

To fully grasp a measure of time that large, we can only look backwards. Five hundred years ago there was no America, there were only the tribes. It was Chippewa country when the United States government finally came knocking in the 1800's. The Bois Forte Band of Chippewa and the Fond du Lac and Grand Portage Bands of Lake Superior Chippewa were all signatories to the 1854 Treaty of La Pointe.

The tribes gave up ownership of the land but retained hunting, fishing and gathering rights. Today, an intertribal agency called the 1854 Treaty Authority manages rights and natural resources in the ceded territory.

The entire PolyMet project, including a proposed land exchange with the U.S. Forest Service, is situated within the boundaries of the 1854 ceded territory.

Among the EPA's objections to the PolyMet project as it was detailed in the first draft of 2010 was a lack of attention to the impact on tribal hunting, fishing and gathering areas.

In September, staff from all three Chippewa bands, the Great Lakes Indian Fish and Wildlife Commission and the 1854 Treaty Authority submitted a 100-page "cumulative effects analysis" outlining their objections to the revised environmental-impact statement.

The tribes were included in the process both times as "cooperating agencies," which meant an advisory role with no direct control over the data collection, writing or editing for the statement. Still, their influence on the latest draft is easy to spot.

This level of tribal engagement is not limited to the PolyMet project or the Minnesota tribes, says Nancy Schuldt, the Fond du Lac water-projects coordinator: "Today, tribes are exercising environmental authorities to a greater extent. There has been a tremendous amount of capacity building in terms of tribal staff and expertise to actually follow up on our request for a seat at the table when decisions like this are being made."

It's not just legal standing the tribes bring to the table, but a way of thinking about the 500-year problem. "It's quite common for tribes to be thinking about what actions of today would do to affect seven generations down the road," says Schuldt.

"There's a perspective that tribal communities put forward that if there's any concern that what you're doing today is going to make this world a worse place for my grandchildren or your great-grandchildren, then it simply should not be done. It’s a different worldview."

The mining of iron ore, meanwhile, has been altering northern Minnesota ecosystems for more than a century, and Schuldt wants that to be the starting point for any conversation about the impact of mining what is sometimes called nonferrous, or noniron, metals.

In northern Minnesota, copper, nickel and other nonferrous metals are embedded in rock that also contains sulfide. (That's why this kind of mining is often called sulfide mining.) When you expose the rock to air and water, sulfuric acid is created. It's the acid runoff from the exposed rock that somebody will have to be watching and treating for hundreds of years. 

In their response to a recent draft, the tribal cooperating agencies write that current and historic mining activities have "profoundly and, in many cases, permanently degraded vast areas of forests, wetlands, air and water resources, wildlife habitat, cultural sites and other critical treaty-protected resources within the 1854 Ceded Territory."

If the PolyMet proposal promises pollution control, the position of the tribes is, we don't buy it.

"The State of Minnesota has existed for 155 years," they write. "The United States of America has existed for 237 years. The notion that a mining company and financial assurance instruments will be available to work on a mine site 500 years from now is not believable."

"It's easy to say no," says Jim Miller, former senior geologist for the Minnesota Geological Survey. "It's much harder to say 'yes, but…' "

Miller, now an associate professor in the geological-sciences department at the University of Minnesota Duluth, has been studying the rock formations of northern Minnesota since the 1980s. His focus has been the geology and mineral deposits of what is known as the Duluth Complex, wedged between Minnesota's Lake Superior shore and the Canadian border.

It's the largest undeveloped copper-nickel deposit on earth, says Miller. "There will be mining in our backyard for 100 years."

The question, he says, is by whom and what method.

Miller says that the mining industry has only itself to blame for any trust deficit, but adds that the industry has changed. He's toured mines like the one PolyMet is proposing. He's seen the industry and its technologies evolve. He wants PolyMet to succeed "so we can show the world how to do this kind of mining right."

The geological and environmental-science programs have merged at his university and, increasingly, Miller is encountering young environmentalists. "If you really want to protect the earth," he tells them, "get into mining geology and protect the earth one mine at a time."

Miller insists his position on copper-nickel mining is his own. "I've never consulted for these companies and I don't own stock, but half the people who work at these companies are UMD graduates and I know they are very passionate about doing this right," he says. "That's my dog in this fight."

University of Minnesota ties to PolyMet go beyond executives and engineers with alumni status. PolyMet's chief operating officer, Joe Scipioni, is an adviser to the university’s Natural Resources Research Institute. And Paul Brunfelt, a key engineer on the project with a focus on wastewater treatment, serves on an advisory committee for the university's chemical-engineering department.

In 2005, PolyMet commissioned the university's Labovitz School of Business and Economics to create an economic-impact statement for its proposed mine. The company has trumpeted subsequent university studies on the economic potential of copper-nickel mining in the state. 

These kinds of ties are common between research universities and industry. "There is plenty of room for differences of opinion in interpreting any of the economic, technical or social data about a mine development," says David Chambers, a geophysicist and president of the Center for Science in Public Participation, in Bozeman, Mont., where part of his job is to review environmental-impact statements, often on behalf of environmental groups or tribal governments, for sound science and best practices.

"The problem," he says, "is that we don't see economists or technical experts from academia providing analyses from a slightly critical point of view, instead of just from a slightly supportive point of view. There's no financial support for the contrarian analysis."

Promise, whether it takes the form of corporate vows or the forecasts of research institutions, is meaningless without accountability — especially in a high-stakes situation like this one.

Chambers points to an essential accountability method employed by states doing business with mining companies. Not everybody does it the same, but everybody does it. It's called financial assurance.

Here's how it works: The company games out a scenario in which it goes belly up or has to walk away from a fully operational mine. (This is not an infrequent occurrence, says Chambers.) It runs calculations to estimate what it would cost the state to take on mine closure and cleanup. Then, sometime before a state issues a permit to mine, the company provides money toward closure-and-cleanup costs in the form of a bond or trust fund or some other financial instrument.

It's protection for the taxpayers — if it's done right. And that's what Minnesotans ought to be watching for, says Chambers.

Recently, Minnesota State Auditor Rebecca Otto spoke out on the issue of financial assurance. In an op-ed in the Star Tribune: "I am charged with looking out for taxpayers’ financial interests. Based on the evidence I have seen so far, I am not convinced that we know how to accurately quantify the size of the financial risk of this type of mining."

The first draft of the impact study was roundly criticized for lacking any meaningful discussion of financial assurance. The second draft does go further, with actual numbers, including cost estimates for annual postclosure monitoring and maintenance at up to $6 million.

The estimate is a start, says Daub of Friends of the Boundary Waters Wilderness, but it is without context: "We don't know how this was reached, what went into it or any details about the financial instrument that might be used. Does it include the cost of replacing the treatment plants at certain intervals? It's hard to know how meaningful it is right now without the details."

David Chambers believes the public ought to know as much as PolyMet knows about potential financial risk, as early as possible.

Whatever it is, it's a big number. "And it puts the public at financial risk if agencies or the company doesn't get it right," says Chambers. "And it's the public who bears any environmental harm. Either way, the public holds the ultimate risk."

Otto has called for changes in state rules that govern the mining of nonferrous metals. "Because water quality continues to be affected years after a mine is closed," she wrote in her op-ed, "sufficient funds to clean up the site must be retained to cover perpetual water treatment when necessary. Payment in full of financial assurances, in cash or cash equivalents, should be required before mining commences."

The U.S. Government Accountability Office looked at the adequacy of financial assurances for copper and other hard-rock mining and found that 57 sites now in operation across the country "had inadequate financial assurances — amounting to about $24 million less than needed to fully cover estimated reclamation costs."

PolyMet did not respond to repeated requests for comment, but Minnesota DNR officials say the time for more precise calculations will come before a permit is issued and after a final environmental-impact statement is published.

If the public wants more analysis sooner, there will be an opportunity to say so in the coming comment period, which will include at least three public hearings and will commence today with the release of the revised draft.

"If the environmental-impact statement isn't done right, it's certainly in part because of our failure to have gotten the level of analysis that was needed," says Steve Colvin, deputy director of the Ecological and Water Resources Division at the DNR. "We learned a lot from that (first) draft."

Colvin says this impact statement is the most complex he's seen during his 20 years with the DNR and says that the public's role in demanding more from PolyMet and the impact statement is not trivial or token. If the last go-round is any indication, Minnesotans will accept the invitation to get their thoughts and concerns in the public record.

"For the last draft, the volume of comments was the highest in our agency's history," he says. "We really want to do the most robust assessment of this proposed project that we can, and the public is a key part of helping us do that."

Copper mining is not new to the United States, but it will be to Minnesota. Just as environmentalists point anxiously to the industry's risk of pollution, mining supporters insist they'll have the will and the tools to manage it and point optimistically to new technologies.

Both sides will mobilize their constituencies during the coming public-comment period. When it ends, work on a final environmental-impact statement will begin. Then comes the permitting stage. If PolyMet gets its permits, the door to copper-nickel mining in Minnesota will swing wide open and whatever regulatory and accountability mechanisms the state asserts during these final stages may serve as a template for a new era.

"We're wrestling not only with the future of PolyMet," says Betsy Daub, "but with the future of this industry in Minnesota."