PolyMet and Twin Metals sell out to foreign investors


In the last ten days, the PolyMet and Twin Metals projects have sold significant stakes of their proposed sulfide mines to foreign commodities investors. This demonstrates that if these mines open, the metals produced will be sold overseas and the profits will flow to wealthy foreign investors and multinational corporations.

This morning, PolyMet announced it received a $20 million bridge loan from Glencore, its financing partner for the proposed mine. This is to allow time for PolyMet to sell an additional $60 million in stock to finance their development plans. This increases Glencore’s stake in PolyMet from a current 25% to a larger amount, but “it will not exceed 49.99 percent,” according to the Star Tribune. Glencore already has an agreement in place to buy the ore from the PolyMet mine if it opens.

Last week, Duluth Metals (majority owner of the Twin Metals project) announced that it received a $30 million (CDN) investment from CEF Holdings to finance the Twin Metals proposal. Hong Kong-based CEF Holdings is a joint venture of Cheung Kong Holdings and the Canadian Investment Bank of Commerce (CIBC.) Both of these entities are connected to Li Ka-Shing, the richest man in Hong Kong and one of the 10 wealthiest people in the world. Mr. Li’s Hong Kong conglomerate contains several companies, the largest of which are Cheung Kong Holdings and Hutchison Whampoa.

Advocates for sulfide mines like to argue that these are American strategic metals. But these transactions show these proposals would enrich multinational corporations and the wealthiest people in the world at the expense of Minnesota’s resources, economy, and environment.

Duluth Metals’ new investor is particularly problematic. In the past, Mr. Li’s companies have attempted to acquire American strategic assets, but congressional and regulatory attention has scuttled his attempts. In 2003, Hutchison Whampoa’s bid for American fiber-optic company Global Crossing was blocked by regulators over concerns that it would threaten U.S. national security. Li’s close ties with the Chinese government were cited as reasons to reject the deal.

Swiss-based Glencore is in the final stages of a deal to merge with mining company Xstrata, which would create the largest commodities trading firm in the world and the 4th largest mining company in the world. This merger is being held up by Chinese regulators, fearing that Glencore would control too much of the global copper market. Reports indicate that China may require Glencore to sell some of its producing copper mines before it will approve the deal.

The CEF Holdings investment in Twin Metals also has a connection to Glencore. Simon Murray, the Chair of Glencore’s Board of Directors, once ran Hutchison Whampoa and currently serves on the Cheung Kong Holdings Board of Directors.

While the financing of these projects is complex, the meaning is plain. If sulfide mining projects are approved, Minnesota’s resources will be for sale to the highest bidder, and Minnesota’s environment will be in the hands of multinational corporations with terrible environmental track records.

The Friends of the Boundary Waters is watching investment in these proposals carefully, and will update our members and the public of the implications of new developments.

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