Should regulators judge PolyMet on Glencore’s record?


An environmental group has asked Minnesota regulators to take a hard look at the privately held international organization behind PolyMet Mining Corporation before approving any permits for its planned sulfide mining operation.

PolyMet Mining is perhaps a year away from obtaining the permits to open Minnesota’s first sulfide mine for copper, nickel, and precious metals like platinum, palladium, and gold from an ore body near Hoyt Lakes and Babbitt, Minn.

PolyMet has gotten this far with financial backing from Glencore International AG — the target of some vehement criticism on several continents. Glencore is transforming itself into a publicly traded company.

The environmental organization WaterLegacy and environmental attorney Paula Maccabee have been looking at Glencore’s record. Maccabee doesn’t like what she sees, and she doesn’t mince words talking about it.

“We discovered to our chagrin that Glencore, the important financial partner of the PolyMet mine, has had the reputation of being the worst corporation on the globe,” Maccabee said. “We learned that the problems were economic, worker related problems, environmental harm, and in the case of a plant in France, the extraction of Glencore of the financial resources from its subsidiary, leaving a liability that the French government estimated at $400 million.”

The report describes serious problems with the Mopani copper mine in Zambia, Africa, 73 percent of which is owned by a Glencore subsidiary. According to the report, 71 miners lost their lives at that operation in 2005. The report also provides some details of serious environmental degradation from a pipe rupture and an acid spill there. It notes that mine lost 1,000 jobs in 2008 and 2009 as copper prices fluctuated.

The report also finds environmental degradation in northern Colombia coal mines operated by Glencore subsidiaries.

All this mean should prompt additional scrutiny for PolyMet’s proposed Minnesota project.

“Among the questions regulators need to be asking,” Mccabee said, “is how is the financial assurance going to be provided for PolyMet? What is the role that Glencore International is going to play? Are its deep pockets going to be available for financial assurance, and what degree of control is Glencore International, with its spotty track record, going to have over the prospects and the practices of that future mine?”

Brad Moore, PolyMet Executive Vice President for Environment and Government Relations, said Glencore’s control of the project will be minimal. Glencore is a minority partner in PolyMet and even if Glencore cashes in stock options it now holds, it’s still a minority partner, he said.

Moore also said Glencore’s record is irrelevant.

“Glencore is an investor,” Moore said. “PolyMet is a company that will get the permits, and also will be the company that is responsible for the financial assurance under the laws of the State of Minnesota, and as a result, the mine that will be operated and permitted here in Minnesota has to conform to our laws and our regulators.”

Moore, former commissioner of the Minnesota Pollution Control Agency, said Minnesota law and Minnesota regulators provide the assurance of a clean mine operation.

“When the mine is actually developed and operated, adequate financial assurance must be in place, regardless of ownership,” said Moore, also former assistant commissioner for operations of the Minnesota Department of Natural Resources. “And the regulatory authorities in Minnesota will ensure that.”

Details of PolyMet’s financial assurance won’t be completed until the permitting process is underway, Moore said. That follows the environmental review process which is now underway. A supplemental draft environmental impact statement on the project is expected late this spring or this summer.

Moore said PolyMet won’t be able to line up financial assurances from investors until the environmental review is complete.

That’s small comfort to Maccabee.

“What we’re saying is not only PolyMet’s scant resources, but the resources and practices of Glencore International, its huge capital partner, have to be investigated,” Maccabee said.