Both sides declared victory following a Minnesota Supreme Court ruling Wednesday that affirms the Court of Appeals’ rejection of PolyMet Mining’s permit for a proposed copper-nickel mine near Babbitt and Hoyt Lakes.
The decision remands the case back to the state’s Department of Natural Resources for a contested case hearing. The agency also was ordered to fix a definite term—or duration—for the permit if one is granted in the future.
Several environmental groups and the Fond du Lac Band of Lake Superior Chippewa, respondents in the case, labeled the ruling “pivotal” and “a resounding victory” for communities at risk to pollution from the mine. They called Wednesday’s ruling “crippling [to] the company’s sulfide mining proposal in Northeastern Minnesota.”
“With its permit to mine now overturned, PolyMet must start over or consider ending their failed effort to build a dangerous, toxic mine in Minnesota’s Lake Superior watershed,” said Paula Maccabee, counsel for respondents WaterLegacy.
PolyMet, meanwhile, lauds the decision because it overturns other parts of the Court of Appeals’ 2020 opinion, which it says ordered an “open-ended” hearing. Wednesday’s ruling limits to just one the bevy of issues that environmentalists wanted to raise at a hearing.
“Despite the media narratives spun by opponents of our project,” said Bruce Richardson, a PolyMet spokesman, “the Minnesota Supreme Court’s opinion ruled in PolyMet’s favor on six of the eight issues, including the most significant legal issue.”
It appears that both sides have reasons to celebrate.
The unanimous ruling—Associate Justice Paul Thissen did not participate—affirms a key portion of a Jan. 13, 2020, Court of Appeals’ opinion that rejected the mine’s permit.
The lower-court ruling, written by former Chief Judge Edward Cleary, found that the DNR’s decision to deny a contested-case hearing on the NorthMet project was based on errors of law and was unsupported by substantial evidence.
Cleary and his panel also found that the DNR erred by failing to provide a “definite term”—a fixed number of years—for the NorthMet mining permit to be in effect.
On the definite-term issue, the Supreme Court concurred completely.
DNR rules provide that a permit “term” is “the period determined necessary by the commissioner for the completion of the proposed mining operation, including post-closure maintenance.” By issuing a permit that does not cover a finite period of years, justices ruled, the DNR erred.
But on the contested-hearing question, the Supreme Court ruling is a mixed bag for respondents. They will get the hearing they want. But it will only address one issue—the permit application’s so-called “bentonite amendment” to their permit application.
The issue involves PolyMet’s proposed tailings basin near the mine. Tailings are a waste by-product of ore processing. The company’s plan calls for mixing NorthMet tailings with water, then pumping the mixture into a slurry. To contain that material, the company plans to build a new dam.
It is crucial to keep tailings away from water and oxygen because exposure could release toxic metals and sulfate into nearby groundwater. To avoid that, the company plans to use bentonite—a natural clay sealant—on the exterior side of its dam and along the beaches and bottom of its tailings basin.
The clay, if it works as advertised, would act as an oxygen barrier to protect the environment.
Respondent groups, including the Minnesota Center for Environmental Advocacy and WaterLegacy, challenged the DNR’s finding that bentonite is a “practical and workable” solution to that problem. They contend there is no evidence in the record showing that the “bentonite amendment” has been tested or will be effective at reducing oxygen and water infiltration into the stored tailings.
“We agree,” Associate Justice Natalie Hudson writes in Wednesday’s ruling. References to bentonite in the project’s final environmental impact statement mostly consist of descriptions, objectives and conclusory statements about its effectiveness, the justice writes.
“But there is no analysis of the scientific basis for the DNR’s assumptions,” she adds.
Further, the lone study on which the DNR pins nearly all of bentonite’s expected effectiveness isn’t part of the court record, the ruling says. The agency tried to introduce it after oral arguments, Hudson notes, but the court denied its motion.
“Given this void,” Hudson writes, “we cannot conclude that substantial evidence supports the DNR’s decision to deny the petitions for a contested case hearing on bentonite’s effectiveness.”
By contrast, she writes, respondents provided plenty of evidence questioning bentonite, including a statement from an outside DNR consultant that is quoted in the ruling: “We do not believe it will function as intended,” the consultant said, “because of the unproved application methods.”
The court ordered the DNR to conduct a hearing to determine whether the bentonite amendment provides a “practical and workable” reclamation technique that satisfies its reactive-waste rules.
The DNR issued a statement Wednesday saying it is reviewing the decision and will abide by the court’s orders.
The court denied requests for contested case hearings on other issues raised by respondents. “They essentially wanted a ‘do-over,’” Richardson said of his company’s opponents. “They didn’t get it.”
The court, for instance, rejected the respondents’ argument that a contested hearing is needed to address an “upstream construction design” for PolyMet’s proposed dam.
Nor, the court found, is there need for a hearing to explore alternatives to PolyMet’s planned “wet closure” covering to its tailings basin. That plan involves creating a 900-acre pond to prevent oxygen from reaching the stored tailings.
The DNR denied both those hearing requests after determining, based on “substantial evidence,” that the dam construction method is sound and that the wet closure covering is the best available alternative, the Supreme Court ruled.
The ruling also overturns a Court of Appeals’ order for a hearing to address whether PolyMet’s financial assurances are sufficient to cover reclamation and other long-term costs associated with the project.
The DNR had pointed out that argument was raised only in an amicus brief, not by respondents, and justices agreed it was not properly before the court.
The Supreme Court similarly rejected respondents’ request for a hearing to determine if Swiss company Glencore should be listed as a NorthMet project co-permittee. The company owns a substantial interest in PolyMet’s stock and has helped finance the NorthMet project. But that issue was not raised in respondents’ timely filed petitions, the court ruled, and likewise was not properly before the court.
Most significantly, according to Richardson, the court sided with PolyMet’s interpretation of Minn. Stat. § 93.483, subd. 3(a)(l}-(3), while rejecting both respondents’ argument and the Court of Appeals’ ruling on the issue.
The ruling, Richardson said, means that the DNR retains its discretion to reject requests by project opponents for contested case hearings.
“We do not agree that simply identifying factual disputes in a petition leads to the conclusion that a contested case hearing necessarily will help the commissioner make a decision on a permit to mine application,“ Hudson writes. [Emphasis in original.]
“In sum, we hold that the DNR has the discretion to determine whether a hearing on the factual disputes in a petition for a contested case hearing will ‘aid’ the agency in making a final decision on the completed application,” the rulings says.
“We are very pleased with the outcome,” Richardson said. “This is a big legal victory for us and another step forward.”
Respondents, in a joint written statement issued Wednesday, read the ruling’s larger implications much differently.
“The decision underscores the DNR’s failure to scrutinize what would be the first sulfide mining operation in the state,” the statement reads, “and signals an important change in how mining permits will be viewed by the courts in the future.”
Rep. Jim Davnie, DFL-Minneapolis, whose “Prove It First” bill would place a legislative moratorium on non-ferrous sulfide ore permits and has 34 co-sponsors, also weighed in on Wednesday’s decision.
“As the science shows us, we know copper sulfide mining carries a significant threat of water pollution, which can have devastating consequences,” he said. “Minnesotans deserve transparency—and today’s decision provides a path forward in permanent protection for generations to come.”
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