PolyMet’s risk to Minnesota Taxpayers
It’s no secret copper-sulfide mining poses an enormous threat to the unique wilderness and clean water of northern Minnesota.
But few realize it also threatens our pocket books.
Why is this?
Because the financial assurance package is structured to benefit PolyMet investors first and Minnesota taxpayers last.
Here’s a summary of the key points of their findings. There’s no hyperbole, no emotion. Just facts that every Minnesotan should be aware of.
The state of Minnesota has financial assurance rules in place to ensure that companies that open non-ferrous mines (i.e: copper-sulfide mines) will have funds available to restore the land after use.
With PolyMet, the financial assurance package is structured so that Glencore — who owns the majority of PolyMet — along with other investors are paid off first THEN, after nine years of being in operation, PolyMet is required to gradually build up their financial assurance fund. The State’s hired experts have said that the financial assurance relies not on cash but on surety bonds and letters of credit that PolyMet is unlikely to secure.
By the 11th year of operations, there will only be $24 million in the cash financial assurance fund. This leaves $1 billion in potential clean-up costs for Minnesota taxpayers.
The reason such a structure is alarming is the PolyMet mine project is itself a risky financial investment. It’s marginally profitable.
Minnesota may be sitting on a lot of copper, but it’s very low grade and hence very expensive to mine. We know that, based on their filing with Canadian Securities Administrators (PolyMet is a Canadian company) they had to misrepresent state regulations, the size and scope of the mine, and that their forecast depends on a higher price of copper than exists today.
If anything should happen to the market price of copper, PolyMet’s profitability would be significantly reduced. In such a case it would likely cease operations or declare bankruptcy. The investors might be paid off, but Minnesotans would be left with a big cleanup bill.
The chart below drawn from DNR’s own data illustrates the gap between PolyMet’s cleanup costs and the cash available to cover these costs.
WHAT CAN YOU DO?
The way PolyMet has set up their financial assurance package is a classic case of socialize the risk, privatize the profits.
Why should Minnesotans pay for another’s profits?
It’s time our elected officials started to ask this and other hard questions.
We need legislative hearings into PolyMet’s permitting process. Make your voice herd. Click the button below to sign the petition. This is a problem the state of Minnesota can’t ignore.
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