Under Recent Court Rulings, the Minnesota DNR Now Has the Option to Expand Upcoming PolyMet Contested Case Hearing

Alt text: Miner and construction vehicle in forest

By Kevin Swanberg

JD Candidate, Mitchell Hamline School of Law, 2024.

In Northeastern Minnesota, political and legal controversy surrounds a proposed copper-sulfide mine near the St. Louis River and Lake Superior.[1] This mine, referred to as the Northmet Project by Polymet Mining, or simply Polymet, excites proponents because of its potential job prospects.[2] In contrast, opponents are concerned because of the mine’s potential for negative environmental impacts in the Lake Superior Watershed[3] and the track record of the mine’s ownership, Glencore, who have a record of international human rights abuses and environmental pollution.[4] On November 1, exactly three years from the Minnesota Department of Natural Resources (DNR)’s first issuance of the PolyMet permit to mine, proceedings began in a contested case hearing regarding one disputed aspect of that permit.[5] Despite downstream communities and environmental groups raising several concerns with the permit, the DNR has limited the scope of that hearing.

At issue in the pending contested case hearing is the design of PolyMet’s proposed mine. Similarly constructed mines around the world have polluted nearby waters and have a high likelihood of failure.[6] In 2020, such a mine collapsed in Brazil, killing nearly 250 workers and polluting the surrounding area.[7] In April 2021, the Minnesota Supreme Court held that the DNR must hold a contested case hearing regarding a new and controversial aspect of the Polymet mine’s design: the use of bentonite clay as a sealant for their tailings basin.[8]

A contested case hearing is a “quasi-judicial” proceeding in which parties present evidence before an Administrative Law Judge (ALJ).[9] A contested case hearing allows concerned citizens or organizations to challenge the decision of a government agency before an ALJ.[10] Once an ALJ has issued their findings of fact, an agency’s decision must be based on those findings of fact.[11] This makes contested case hearings a powerful tool both for agencies to make informed decisions and for concerned groups and citizens to influence agency decision-making, as is the case in the upcoming contested case hearing regarding the PolyMet permit to mine.

While environmental organizations and downstream communities are concerned about several aspects of Polymet’s permit,[12] only one aspect is at issue in the contested case hearing.[13] Polymet must separate the metal from the surrounding rock.[14] The result of this process is a large amount of acidic waste rock and wastewater that could pollute nearby surface and groundwater.[15] To avoid this, Polymet would place these “tailings” in large tailings basins, where they must be stored for hundreds of years.[16] Polymet’s tailings would be stored using what is called a stacked or “upstream” design, wherein the wall of the dam is formed from the mine waste itself, stacked over time in a fashion that slopes in toward the slurry.[17] first with a sealant and then water.[18] The purpose of the water is to prevent oxygen from contacting the tailings, which can create “acid mine drainage.”[19] The covering of these tailings in water is called “wet closure.”[20] In the below diagram, the upstream design is shown, compared to other designs used for tailings dams.[21] As is clear, in an upstream design the dam itself sits upon and is supported by the tailing slurry it is supposed to be blocking.[22] After the Brazil dam disaster, this design was banned in Brazil, and the country ordered that existing dams with this design to be decommissioned.[23]

[24]

To strengthen this design, PolyMet has proposed sealing the dam and the bottom of the tailings basin with bentonite clay.[25] This design has been criticized by environmental groups as insufficiently tested and unproven.[26] In April, the Minnesota Supreme Court ruled that the DNR must hold a contested case hearing only on this aspect of the Polymet permit to mine, finding that the DNR and Polymet had not presented sufficient evidence that this plan was safe or acceptable.[27] The court did not require the contested case hearing to address other issues raised by plaintiffs, including the aforementioned upstream dam design and the wet closure method of covering tailings in the tailings basins.[28] However, in its holding, the supreme court also noted that the DNR could, at its discretion, expand the scope of the hearing beyond the discussion of the use of bentonite clay to other aspects of the DNR’s Permit to Mine.[29] The contested case hearing’s presiding judge has also confirmed this holding.[30]

Despite this, the DNR has declined to expand the scope beyond this single issue.[31] This decision by the DNR to limit the contested case hearing’s scope is concerning because it limits environmental groups’ ability to provide relevant information about the shortcomings of Polymet’s mine design, and it limits the DNR’s ability to make an informed decision based on the contested case hearing’s record, thereby reducing public trust in Minnesota’s environmental review process, the DNR’s decision-making, and the PolyMet project.

By limiting the scope of the contested case hearing to just the issue of bentonite clay as a sealant and ignoring factors like the wet closure and upstream dam design, the DNR is severely limiting relevant information that should be used in its decision-making process. Environmental groups presented evidence before the Minnesota Supreme Court that the bentonite clay amendment impacted the stability of the proposed upstream dam design.[32] Therefore, if the DNR is to make an informed decision on the use of bentonite clay on the walls of the dam, it must consider the overall stability and effectiveness of the dam design and how the addition of bentonite clay may impact the design.

Similarly, the wet closure method is also put into question by the use of bentonite clay. The court found that the DNR and Polymet could not provide any evidence that Polymet would be able to apply bentonite clay to the tailings while they were submerged underwater and could not provide evidence that the bentonite seal would prevent water (and oxygen) from coming into contact with the tailings, thereby increasing the risk of acid mine drainage.[33] As in the case of the dam’s design, the DNR will need to evaluate the effectiveness of the wet closure method in light of the use of bentonite clay as a sealant. The DNR would be able to do so by expanding the scope of the hearing to include arguments on these two factors, but it has not done so.

The environmental review process for Polymet has been marred by procedural errors and agency conflict. The upcoming contested case hearing is a unique opportunity for the DNR to rebuild public trust in such an important decision. In February of this year, the Minnesota Supreme Court held that the MPCA must reconsider the mine’s air pollution permit when environmental groups presented evidence that the company may have been engaging in a “bait-and-switch” tactic by proposing an initially smaller mine to satisfy air pollution regulations, which it allegedly intended to expand later.[34] Additionally, an investigation found that the Environmental Protection Agencythe agency delivered comments on the mine’s National Pollutant Discharge Elimination System (NPDES) permit over the phone, instead of in writing, preventing the comments from becoming part of the public record.[35] In addition, the Minnesota Supreme Court held in its ruling ordering the contested case hearing that the DNR improperly issued the Polymet permit to mine without a fixed term, essentially granting the mine what opponents called a “forever permit,” in violation of regulations.[36]

These legal and procedural failures by agencies harm Minnesotans’ trust in their government to properly vet projects and protect Minnesota’s environment. For this reason, the DNR should expand the scope of the hearing to include concerns about the upstream dam design and the wet closure method. Doing so would be a strong step toward demonstrating to the public that permitting agencies intend to make environmental review a transparent and honest procedure, rather than a strictly limited and hidden one.

Further, the Minnesota Supreme Court’s April decision did not consider the merits of the Polymet permit to mine. Its ruling was only on the DNR’s decision to not order a contested case hearing.[37] This means that the same environmental groups that originally sued the DNR regarding the agency’s decision to issue a permit to mine to Polymet could sue again if they find the DNR’s decision unsatisfactory. For the sake of public trust, transparency, and judicial efficiency, the DNR should therefore use the contested case hearing as an opportunity to thoroughly vet all concerning aspects of the permit to mine by expanding the contested case hearing. Not doing so invites further suit on the merits of the permit itself.

The DNR’s present failure to expand the scope of the forthcoming contested case hearing is a poor use of Minnesota’s environmental review processes. The DNR is able to expand the hearing, and doing so would allow the DNR to weigh its decision to issue Polymet’s permit to mine with all relevant facts presented. Further, doing so would help establish public trust in Minnesota’s institutions at a time when public trust for government is low.[38] The fact that more than half of Minnesotans believe the state should “move on” from Polymet[39] gives the DNR an even stronger reason to want to make the process as transparent and informative for all parties as possible. At a time when Minnesota is grappling with numerous impacts from climate change and industrial pollution,[40] robust and thorough environmental review is more important than ever.

***

  1. See Elizabeth Dunbar and Dan Kraker, FAQ: Everything You Need to Know About PolyMet, MPR News (Dec. 2, 2013, 3:00 PM), https://www.mprnews.org/story/2013/12/02/faq-everything-you-need-to-know-about-polymet [https://perma.cc/6ZHD-8GQF]. ↑

  2. See Walker Orenstein and Eric Killelea, PolyMet and Twin Metals Say They’ll Create Thousands of Iron Range Jobs. Does Minnesota Have the Workers to Fill Them?, MinnPost (Oct. 30, 2019), https://www.minnpost.com/good-jobs/2019/10/polymet-and-twin-metals-say-theyll-create-thousands-of-iron-range-jobs-does-minnesota-have-the-workers-to-fill-them/ [https://perma.cc/6FS8-NK2U] (“PolyMet says it plans to directly employ 360 people at an open-pit mine near Hoyt Lakes and create more than 600 spinoff jobs.”). ↑

  3. Lorraine Boissoneault, Conflicted Over Copper: PolyMet Copper-Nickel Mine Has Been Trapped in Litigation, Great Lakes Now (June 12, 2020), https://www.greatlakesnow.org/2020/06/polymet-copper-nickel-mine-litigation-indigenous-environmental-groups/ [https://perma.cc/7H4J-2G8B] (“As PolyMet’s proposed copper mine, NorthMet, has moved forward, tribal communities and environmental advocacy groups who have long grappled with the problems caused by taconite mining are now arguing vociferously against a copper-nickel project that could be even more damaging.”). ↑

  4. Mike Hughlett and Jennifer Bjorhus, Meet Glencore, the Global Behemoth behind the PolyMet Mine Project, Star Trib. (Minn.) (July 13, 2019, 7:50 PM), https://www.startribune.com/meet-glencore-the-global-behemoth-behind-the-polymet-mine-project/512685412/ [https://perma.cc/P2KU-9YEP] (reporting that a 2017 report by Latin American NGOs found that the company both polluted and misused water resources in several Latin American countries, harming the water supplies of local communities. The report further noted that the company has been investigated, sanctioned, and fined many times for violations of human rights and laws.). ↑

  5. Order Granting Motions for Prehearing Conference Statements at 2, In re Northmet Project Permit to Mine Application, OAH 60-2004-37824 (2021); See also Laura Butterbrodt, DNR Contested Case Hearing Will Examine PolyMet Use of Bentonite Clay in NorthMet Mining Permit, Duluth News Trib. (Minn.) (Sept. 24, 2021, 7:12 PM), https://www.duluthnewstribune.com/business/energy-and-mining/7210116-DNR-contested-case-hearing-will-examine-PolyMet-use-of-bentonite-clay-in-NorthMet-mining-permit [https://perma.cc/BBR3-5BNY] (“The NorthMet mining project permit has been contested for nearly three years, since the DNR issued PolyMet the permit on Nov. 1, 2018.”). ↑

  6. See Walker Orenstein, A Dam Collapse in Brazil Has Some Worried about PolyMet’s Plans. Why the DNR Says It Won’t Happen Here, MinnPost (Aug. 13, 2019), https://www.minnpost.com/environment/2019/08/a-dam-collapse-in-brazil-has-some-worried-about-polymets-plans-why-the-dnr-says-it-wont-happen-here/ [https://perma.cc/MLS8-73NM] (noting the design proposed by PolyMet is similar to a mine dam that collapsed in Brazil killing nearly 250 people). ↑

  7. Id. ↑

  8. In re NorthMet Project Permit to Mine Application, 959 N.W.2d 731, 760 (Minn. 2021). ↑

  9. See William J. Keppel, 21 Administrative Practice and Procedure § 9.23 (2nd ed. 2007). ↑

  10. Administrative Law Contested Case Hearing Guide, Minnesota Office of Administrative Hearings (Oct. 25, 2021) https://mn.gov/oah/self-help/administrative-law-overview/contested-case-hearing-guide.jsp [https://perma.cc/V3PU-UW6R]. ↑

  11. Minn. Stat. § 14.62 (2020). ↑

  12. See Laura Butterbrodt, DNR Contested Case Hearing Will Examine PolyMet Use of Bentonite Clay in NorthMet Mining Permit, Duluth News Trib. (Sept. 24, 2021, 7:12 PM), https://www.duluthnewstribune.com/business/energy-and-mining/7210116-DNR-contested-case-hearing-will-examine-PolyMet-use-of-bentonite-clay-in-NorthMet-mining-permit [https://perma.cc/BBR3-5BNY]

    (“‘By excluding from this hearing critical issues like dam safety, hundreds of years of pollution, and whether taxpayers are protected from cleanup costs, Governor Walz and the DNR are once again showing they aren’t listening to downstream communities who have demanded a comprehensive hearing,’ Kathryn Hoffman, MCEA chief executive officer, said in the statement.”). ↑

    .

  13. Id. (“The hearing will examine the use of bentonite clay as a sealant for the proposed tailings basin, and whether the use is a practical and workable technique that will meet the DNR’s reactive waste rule.”). ↑

  14. In re NorthMet Project Permit to Mine Application Dated Dec. 2017, 959 N.W.2d 731, 739 (Minn. 2021). ↑

  15. Id. ↑

  16. Id. ↑

  17. Id.; see also Jennifer Bjorhus, PolyMet Critics Say Firm Relied on Engineer Connected to Mine Dam Failure in Brazil, Star Trib. (July 31, 2019, 12:09 AM), https://www.startribune.com/polymet-critics-site-mine-dam-failure-in-brazil/513408672/ [https://perma.cc/TR38-MC3Q]. ↑

  18. In re NorthMet Project Permit to Mine Application Dated Dec. 2017, 959 N.W.2d 731, 739 (Minn. 2021). ↑

  19. Id. at 751; see also Dan Kraker, Both Sides Claim Victory in Complicated PolyMet Court Ruling, MPR News (Apr. 28, 2021, 3:28 AM), https://www.mprnews.org/story/2021/04/28/supreme-court-orders-new-hearing-in-polymet-mine-dispute [https://perma.cc/QU74-JYUM] (holding “that the DNR must gather more information on whether PolyMet’s plans to line the waste basin with a kind of clay known as bentonite will work as intended to prevent water and oxygen from infiltrating to create a severe form of pollution known as acid mine drainage.”). ↑

  20. In re NorthMet Project Permit, 959 N.W.2d at 751. ↑

  21. Orenstein, supra note 6. ↑

    .

  22. Orenstein, supra note 6. ↑

  23. Bjorhus, supra note 17. ↑

  24. Figure: Orenstein, supra note 6. ↑

  25. In re NorthMet Project Permit, 959 N.W.2d at 752–53. ↑

  26. Id. at 753 (holding that although a bentonite may be a “practicable and workable” solution according to Minnesota law, the evidence presented regarding its effectiveness only amounted to conclusory statements without supporting analysis or research). ↑

  27. Id. ↑

  28. Id. at 759. ↑

  29. Id. at 760 n.4 (“The DNR has the authority to identify the issues and scope of the contested case hearing, Minn. Stat. § 93.483, subdiv. 5 (2020), and may decide to address issues raised by this appeal regarding the legal sufficiency of the permits.”). ↑

  30. Order Granting Motions for Prehearing Conference Statements at 3, In re NorthMet Project Permit to Mine Application (2021) OAH 60-2004-37824. ↑

  31. Id., 2021 WL 4994906, at *2.. ↑

  32. In re NorthMet Project Permit to Mine Application Dated Dec. 2017, 959 N.W.2d 731, 754 (Minn. 2021). ↑

  33. Id. Here, the court notes that Polymet does not address how they plan to apply a uniform layer of bentonite to the bottom of a pond underwater, or how effective this plan will even be. Polymet’s proposed testing plan for this requires that mining operations begin, and two years of tailings accumulate, before they can test if their plan will be effective. Because the effectiveness of this plan is essential to preventing pollution from the mine and to Polymet’s compliance with DNR regulations. The court further notes that the DNR’s findings about the effectiveness of this plan are completely unsupported by the evidentiary record. For these reasons, the court found that there is not substantial evidence to support the DNR’s denial of petitions for a contested case hearing on the effectiveness of the bentonite amendment. ↑

  34. Jennifer Bjorhus, Minnesota Supreme Court Sends PolyMet Air Permit for State’s First Copper Mine Back to the Court of Appeals, Star Trib. (Feb. 25, 2021, 4:55 AM), https://www.startribune.com/minnesota-supreme-court-sends-polymet-air-permit-for-state-s-first-copper-mine-back-to-the-court-of/600027008/ [https://perma.cc/9D6Y-VMSU]. ↑

  35. Jimmy Lovrien, EPA Inspector General: Agency Should’ve Shared PolyMet Permit Concerns with Minnesota Regulators in Writing, Not over Phone, Duluth News Trib. (Apr. 21, 2021, 4:35 PM), https://www.duluthnewstribune.com/business/energy-and-mining/6994420-EPA-inspector-general-Agency-shouldve-shared-PolyMet-permit-concerns-with-Minnesota-regulators-in-writing-not-over-phone1 [https://perma.cc/B8Z3-SV7R]. ↑

  36. In re NorthMet Project Permit to Mine Application Dated Dec. 2017, 959 N.W.2d 731, 758 (Minn. 2021) (holding that the meaning of term referred to in Minn. Stat. § 93.481 requires a fixed period of time be included in a permit to mine, therefore meaning that the DNR erred in issuing a permit that did not include a fixed term); see also Kraker, supra note 19 (quoting Paula Maccabee, counsel for WaterLegacy: “The specific grounds that they used were that the DNR could not issue PolyMet a “forever permit,” and fail to deal with the problems of permanent toxic pollution and indefinite closure”). ↑

  37. In re NorthMet Project Permit, 959 N.W.2d at 760 n.4 (noting that because the DNR must first hold a contested case hearing on the issue of the bentonite amendment, a decision from the court on the legal merits of Polymet’s permits is not appropriate at this particular time.). ↑

  38. See Megan Brenan, Americans’ Trust in Government Remains Low, Gallup (Sept. 30, 2021), https://news.gallup.com/poll/355124/americans-trust-government-remains-low.aspx [https://perma.cc/6CH7-YWZ6]. ↑

  39. Matt Doll, Poll Shows Minnesotans Oppose PolyMet Practices, Minn. Env’t P’ship (Oct. 4, 2021), https://www.mepartnership.org/poll-shows-minnesotans-oppose-polymet-practices/?utm_source=rss&utm_medium=rss&utm_campaign=poll-shows-minnesotans-oppose-polymet-practices [https://perma.cc/D8J7-YXYV] (reporting that 51% of respondents to a recent poll agreed that “Governor Tim Walz should move on from Polymet and chart a different course for economic development in the area,” while 21% agreed that Walz should maintain the current trajectory toward approval of the permits). ↑

  40. See generally U.S. Env’t Prot. Agency, EPA 430-F-16-025, What Climate Change Means for Minnesota (2016). ↑