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Minnesota court rejects 2 major permits for PolyMet mine

At issue are PolyMet's permit to mine and its dam safety permits.
Credit: AP
FILE - This Feb. 10, 2016 file photo shows a former iron ore processing plant near Hoyt Lakes, Minn., that would become part of a proposed PolyMet copper-nickel mine. (AP Photo/Jim Mone, File)

ST PAUL, Minn. — The Minnesota Court of Appeals on Monday rejected two of the most important permits for the planned PolyMet copper-nickel mine in northeastern Minnesota, giving a major victory to environmentalists.

A three-judge panel ruled that the state Department of Natural Resources erred when it declined to order a proceeding known as a "contested case hearing" to gather more information on the potential environmental impacts from the mine. The court also said the agency erred when it issued PolyMet's permit to mine without imposing a fixed term on that permit. So the court sent the dispute back to the DNR with orders to conduct the potentially lengthy hearing, during which an administrative law judge would take testimony and gather evidence.

At issue were PolyMet's permit to mine and its dam safety permits. The court suspended those permits in September because it wanted more information on how the DNR was responding to two major developments since it approved the permits in 2018. Swiss-based commodities giant Glencore took a majority stake in the project. And there was a disastrous failure at an iron mine in Brazil of a tailings basin dam that had some similarities with PolyMet's planned dam.

RELATED: Court suspends key permits for planned PolyMet copper-nickel mine

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Opponents of the project urged the appeals court at a hearing in October to cancel the two permits and order further proceedings to determine whether the mine's environmental and financial safeguards were adequate. They argued that the public and court would be unable to enforce the terms of the permits as written by the DNR.

But attorneys for the department and PolyMet argued that the project has undergone thorough public reviews that met all the legal requirements, and that the permits contain plenty of safeguards to protect the environment and taxpayers.

The appeals court said in its decision that the fact the DNR might have considered evidence during its environmental review and permitting proceedings did not relieve the agency of the need to conduct a contested case hearing. The court did not address most of the opponents' other arguments because it found that the agency had committed legal errors that required reversing the agency's decision to grant the permits.

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Environmental groups involved in the case said they were preparing statements in response. PolyMet also planned a statement. DNR officials did not immediately respond to a request for comment.

Minnesota Senate GOP Majority Leader Paul Gazelka tweeted that the decision was "extremely disappointing. Thousands and thousands of jobs for the Iron Range are again put on hold by liberal courts and radical environmentalists."

The case was one of several challenges pending before the courts in the long-running battle over the project between Babbitt and Hoyt Lakes, which would be Minnesota's first copper-nickel mine.

Next week a Ramsey County judge will open what's expected to be a five- to 10-day fact-finding hearing on alleged irregularities in how the Minnesota Pollution Control Agency handled the water permit for the project. MPCA officials allegedly tried improperly to suppress the federal Environmental Protection Agency's concerns over the permit and keep them out of the public record. 

RELATED: Judge orders search of MPCA computers in PolyMet challenge

The judge will later present his findings to the Court of Appeals, which will consider his report when it decides on a separate challenge by environmental and tribal attorneys to the water permit. The plaintiffs in that case include the Fond du Lac Band of Lake Superior Chipppewa, whose reservation is 70 miles (110 kilometers) downstream from the planned site.

Their chairman, Kevin R. Dupuis, Sr., issued a statement saying:

“The Fond du Lac Band of Lake Superior Chippewa is pleased with the decision of the Court of Appeals, which recognizes that significant questions about the Project’s design still remain. The Court’s decision validates the Band’s concerns about the ability of the Project to protect the environment, the public, and the Band’s treaty resources.”

PolyMet has been working to raise $1 billion in construction financing while it fights off the remaining legal challenges.

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