Army Corps issues PolyMet's final major permit
Mar 23, 2019 05:26AM
● By Editor
By Marshall Helmberger of the Timber Jay - March 22, 2019
Local reaction was swift on Friday to the announcement by the Army Corps of Engineers that it had granted approval of the Section 404 wetlands permit for PolyMet Mining’s NorthMet copper-nickel mine near Hoyt Lakes. The federal permit was the last major authorization that the company needed in order to begin open pit mining operations.
“It’s time to mine,” said state Sen. David Tomassoni, DFL-Chisholm, whose district includes the proposed mine. “This project will bring hundreds of good-paying jobs and millions of dollars in investment to our area and will be a major economic boost to the entire state,” he added.
Other northeastern Minnesota legislators weighed in as well. “The approval of this permit is exciting news today for the people of the Iron Range, said Reps. Rob Ecklund, Julie Sandstede, and Dave Lislegard, in a joint statement. “This been a long time coming to get to this step, and all along the way those involved have been extremely diligent in ensuring this project will meet or exceed all environmental standards. The process has been followed, and with this approval, the process can be proven.”
While supporters of the project argued that the minerals it may one day produce are critically needed and will be produced with minimal impact to the environment, critics noted that the permit approved March 21 will allow the largest destruction of wetlands ever permitted in Minnesota, encompassing just over 900 acres of complex lowland flowages and spruce and tamarack bogs. “This is critical habitat for threatened species, has been designated as an area of high biodiversity significance, and sequesters millions of tons of greenhouse gases,” said Kathryn Hoffman, CEO of the Minnesota Center for Environmental Advocacy. “It's critical that the courts hear challenges to permits before PolyMet can start digging. Once these wetlands are destroyed, they can never be repaired.”
It appears likely, in fact, that courts will be hearing any of a number of legal challenges to the proposed mine. A 6,660-acre federal land exchange that cleared the way for the mine is currently in federal court and state courts are expected to hear challenges to a number of mining and discharge permits issued by the Department of Natural Resources or the Minnesota Pollution Control Agency.
But financial questions may yet pose the bigger challenge to PolyMet’s plans. An updated financial projection issued one year ago presented a far gloomier assessment of the project’s profitability than the company’s previous estimates, issued a decade earlier.
Despite PolyMet’s progress on the permitting front, investors have been decidedly lackluster on the company in recent years. While the announcement of the Army Corps permit sparked a momentary jump in PolyMet’s stock price, from 68¢ a share to 91¢ a share on Friday, the stock price quickly fell back to previous levels.
The company has not indicated how it intends to finance the roughly $950 million in start-up funding, although it appears likely that the global commodities brokerage Glencore Xstrata will play a major role assuming the project proceeds. PolyMet currently owes $243 million in secured convertible and non-convertible debt to Glencore. That debt was due for repayment as of March 31, but PolyMet announced March this week that Glencore had agreed to extend the maturity date on those debts to June 30, 2019, to give the company an opportunity to raise the funds for repayment.
In connection with the extension agreement, the company has also agreed to issue additional purchase warrants to Glencore and to make certain amendments to the existing exchange warrants held by Glencore, subject to applicable stock exchange approval.
“While our immediate goal is to address the Glencore debt, we are proud to be the first mining company to be fully permitted to responsibly build and operate a copper-nickel-precious metals mine within the world-class Duluth Complex,” said Jon Cherry, president and CEO of PolyMet. “Our employees, shareholders, Iron Rangers, labor and business partners all share in this historic achievement. They have steadfastly believed in, worked tirelessly toward and provided unwavering support for this project for so long.”
To read the original article and see related reporting, follow the s link to the Timber Jay website. http://www.timberjay.com/stories/army-corps-issues-polymets-final-major-permit,14941