Environment Minnesota’s Comments to DNR on PolyMet

PolyMet’s Permit to Mine Fails to Protect Minnesota, Should Be Denied

Environment Minnesota

On Tuesday, March 6th, Environment Minnesota submitted the following comments to Minnesota’s Department of Natural Resources:

Commissioner Landwehr,

Minnesota’s Department of Natural Resources (“DNR”) is considering a permit to mine from Poly Met Mining, Inc (“PolyMet”). This permit, if approved, would put the St. Louis River and Lake Superior water basins under constant threat. Environment Minnesota believes the permit to mine fails to provide adequate protection for Minnesotans or the state’s precious water resources. Consequently, we call on the DNR to deny PolyMet’s permit to mine.

This permit does not require PolyMet to use the best available practices for tailings storage. We support the argument laid out by Water Legacy in its Objections to the USDA Forest Service Federal Land Exchange for the PolyMet NorthMet Project: in sum, dry stack tailings disposal would minimize the potential for catastrophic damage and the impact of wetland destruction.[1] Dry stack storage has not been adequately evaluated as an alternative to PolyMet’s proposal at any point in the permitting process.

PolyMet proposes reusing a decades old dam to hold back millions of gallons of tailings.[2] This dam is strikingly to one that broke and spilled 1.3 billion gallons of toxic tailings into the lakes and rivers around the Mount Polley Mine (“Mount Polley”) in 2014, the first of many troubling parallels to the Mount Polley disaster in British Columbia.[3] Mount Polley’s dam failed because it was built on an unstable foundation –simply put, it was a design failure.[4] Proponents of PolyMet frequently cite the difference in steepness of slope between the two mines, but this does nothing to guarantee the stability of the foundation of PolyMet’s dam.

A catastrophic release of tailings from wet storage is foreseeable but avoidable –but only by instead requiring dry stack storage of tailings. 63% of the failures of similarly designed dams for sulfide-ore mines have been Serious or Very Serious, according to a July 21, 2015 report.[5] Until agencies like the DNR stop approving dangerous, outdated wet storage practices, mining operations will not voluntarily implement this new practice.[6] Instead, approving this permit would create a disastrous, improper precedent suggesting that wet tailings storage is an adequate solution for sulfide-ore mines in sensitive watersheds. Consequently, the DNR should require PolyMet to institute best available practices and adopt dry stack tailings storage.

The permit to mine requires adequate financial assurances but does little to guarantee that PolyMet will actually have resources on hand to deal with the consequences of sulfide-ore mining. The DNR is requiring PolyMet to carry $544 million in financial assurance in its first year of operation. The vast majority of these assurances will come in the form of bonds and letters of credit, with a mere fraction of that as cash on hand –specifically, PolyMet will contribute $10 million initially and $2 million per year for the first nine years of the project.  This places PolyMet in a similar position to Imperial Metal, Mount Polley’s owner: reliant on high leverage financial instruments that place PolyMet under risk of bankruptcy, which would likely shift longterm cleanup costs to the people of Minnesota.[7]

Further, this assurance is only designed to cover the expected costs of operation and cleanup. PolyMet will likely require 500 years of water treatment and remediation even without accounting for a dam failure or similar catastrophic event.[8] But Mount Polley stands as a lesson that financial assurances simply do not work if permittees do not carry adequate insurance to cover catastrophic events. Proper insurance requirements aren’t simply a technical detail: they force developers to correctly weigh the costs and benefits of a project before they begin.

Mount Polley’s cleanup will likely cost over $100 million and could run as high as $200 million.[9] Consequently, PolyMet’s proposed coverage of $10 million in environmental liability insurance is clearly, woefully inadequate when considering the possibility of permanent, irreversible damage to the St. Louis River and Lake Superior water basins. PolyMet’s comparatively small annual investment in environmental liability insurance does not accomplish this goal and it does not provide adequate protection to Minnesotans, their special places, or the future of the state. Instead, the DNR should require PolyMet to carry at least $100 million in environmental liability insurance, as this is the demonstrated, practical liability for the catastrophic failure of a wet storage system for sulfide ore tailings.

The many parallels between Mount Polley and PolyMet overwhelm the small differences. PolyMet proposes to use outdated, insufficiently protective tailings storage technology. It has not proven it has the resources to deal with the consequences of using that outdated technology and DNR is not requiring PolyMet to carry sufficient insurance. While the DNR has already approved PolyMet’s dam permit, the permit to mine as written does not sufficiently account for the strong possibility of dam failure under a wet storage system. It also does not require PolyMet to carry adequate environmental liability insurance for a dam failure. Given the continued likelihood of an eventual spill of toxic wet tailings into the St. Louis River and Lake Superior watersheds, this is reason enough to deny PolyMet’s permit to mine.

-Tim Schaefer, Director of Environment MInnesota

[1] Paula Maccabee, “Water Legacy Objections to USDA Forest Service Federal Land Exchange for the PolyMet NorthMet Project,” WaterLegacy, January 4, 2016. http://waterlegacy.org/sites/default/files/u42412/WaterLegacyObjectionsPolyMetNorthMetLandExchange%28Jan.4%2C2016%29.pdf

[2] Dan Kraker, “Draft permit signals DNR is OK with Polymet dam plan,” MPR News, September 15, 2015. https://www.mprnews.org/story/2017/09/15/draft-permit-signals-dnr-is-ok-with-polymet-dam-plan/

[3] Aaron Brown, “Canadian mine disaster raises tough questions about Minnesota nonferrous mines,” Minneapolis Star Tribune, August 7, 2014. http://www.startribune.com/canadian-mine-disaster-raises-tough-questions-about-minnesota-nonferrous-mines/270361401/

[4] Justine Hunter and Mark Hume, “Design failure caused Mount Polley tailings breach, expert panel concludes,” The Globe and Mail, March 25, 2017. https://www.theglobeandmail.com/news/british-columbia/design-failure-caused-mount-polley-tailings-breach-expert-panel-concludes/article22719967/

[5] Lindsay Bowker and David Chambers, “The Risk, Public Liability & Economics of Tailings Storage Facility Failures,” July 21, 2015.

[6] Reuters Staff, “Brazil dam collapse reignites debate over storing mining waste,” November 18, 2015. https://www.reuters.com/article/brazil-damburst-technology/brazil-dam-collapse-reignites-debate-over-storing-mining-waste-idUSL3N13B2W220151118/

[7] Judith Lavoie, “Who’s Paying for the Clean Up of the Worst Mining Spill in Canadian History,” The Tyee, March 31, 2017. https://thetyee.ca/News/2017/03/31/Who-Pays-for-Mount-Polley-Spill/

[8] Josephine Marcotty, “New report says PolyMet mine risk fund is millions short,” Minneapolis Star Tribune, May 13, 2017. http://www.startribune.com/state-walks-a-perilous-line-on-managing-future-mine-risks/422178123/

[9] Gordon Hoekstra, “Imperial Metals pegs Mount Polley cleanup cost at $67 million,” Vancouver Sun, November 17, 2014. http://www.vancouversun.com/technology/Imperial+Metals+pegs+Mount+Polley+cleanup+cost+million/10389778/story.html