PolyMet proposes to open Minnesota’s first sulfide mine. The company’s mineral rights existed on land owned by the Superior National Forest, which prohibits open-pit mining. Polymet, therefore, proposed a “land swap” with the Superior National Forest. Swapping thousands of acres between public and private ownership requires environmental review and scrutiny of the quality of land solicited for exchange in terms of wetlands, species, and habitat.
Prior to the environmental review being completed for the land exchange, in December 2010, the Iron Range Resources and Rehabilitation Board (IRRRB) approved a $4 million loan to PolyMet for the project. The loan violated the state’s environmental review law, which explicitly prohibits major governmental actions, including government investments, on projects whose environmental impacts are not yet known. The law is supposed to prevent giving a green light to projects or the impression that they will go forward until the environmental consequences are known.
MCEA joined co-plaintiffs Center for Biological Diversity, Save Lake Superior Association, Friends of the Boundary Waters Wilderness, and Indigenous Environmental Network in a state lawsuit arguing the IRRRB loan approval violated state law. MCEA filed suit under the Minnesota Environmental Protection Act (MEPA) to invalidate the IRRRB’s decision and prevent the state from taking any further action to assist or authorize PolyMet’s proposed sulfide mine until after the environmental review for the project was completed.
In March 2011, however, the Minnesota legislature passed a law exempting the IRRRB from environmental review requirements under MEPA. Due to the law change, the case was dismissed.
That's just dandy.
But wait.
There's more.
"Antofagasta : IRRRB, DEED lost big bucks on Duluth Metals stock," dated 02/01/2015 and online here, explains:
When the Chilean copper mining company Antofagasta bought out Duluth Metals on Jan. 20, they paid 45 cents for every share of the foundering company's stock.
That's better than the 7 cents per share that Duluth Metals was trading for on the Toronto Stock Exchange when the deal originally was announced last fall.
Still, the buying price was way down from the $3 per share Duluth Metals flirted with in 2011 and 2012. And many stockholders who purchased Duluth Metals in recent years took a big hit -- including a more than $500,000 combined loss for the Iron Range Resources and Rehabilitation Board and the Minnesota Department of Employment and Economic Development.
In unusual moves for both state agencies -- and maybe for any public agency -- economic development officials had purchased outright stock in the fledgling Canadian mining company.
The IRRRB and DEED each lost about $284,000 when Antofagasta took control of the Ely project, now called Twin Metals.
The loss came after both agencies bought into a Duluth Metals predecessor, Franconia Minerals, in a complicated economic development deal that started in 2006.
Public money, down a rat hole. What's your guess of what IRRRB was thinking? Friendships? What?
And how does that recent report square with the bit of orchestrated tap dancing in this hummer?
Rose colored glasses, spin doctoring Karl Rove would envy, what was going on then (March 10, 2011) if the Feb 1, 2015 item is correct about public agency (DEED) and quasi-public slush (IRRRB) taking a bath in red ink? It confuses me. Perhaps good Mr. Sertich can tie it all together with a nice ribbon, in simple words we can all understand. Was it a net bath in red ink, to promote very questionable sulfide mining, or was the bluster of 2011 correct.
It can't be argued both ways, can it. Sertich meeting himself coming back the other way?
Having confusion, a Feb. 4, 2015 Timberjay editorial might be helpful in finding some bottom line:
The real concern behind IRRRB stock purchases
Marshall Helmberger
This past Sunday, the Duluth News-Tribune ran a story on how the Iron Range Resources and Rehabilitation Board lost about $280,000 through its investment in Duluth Metals. The story originated with Aaron Klemz, of Friends of the Boundary Waters, who had crunched the numbers and determined that the agency had failed to recoup all of a $937,500 investment it had made in Franconia stock back in 2011, prior to its acquisition by Duluth Metals. He sent his calculations to a few reporters, myself included.
I opted against the story mostly because we all know hindsight is 20-20. The IRRRB is far from the only investor in Duluth Metals that took a loss. Just about anyone who sunk money into the company came out of the deal with less green in their pocket.
Buying stock is risky. But sometimes it pays off— and the IRRRB has seen gains as well as losses in the handful of stock purchases it has made over the years.
Given the amount of money we’re talking about, roughly $280,000, it struck me as pretty thin gruel for a story that was as convoluted as this one.
When you compare it to the more than $10 million in outstanding loans to the Mesaba Energy Project— money that’s almost certainly gone for good— this was awfully small potatoes. For an agency that takes in $100 million a year in revenue, a $280,000 loss is equivalent to the guy who makes $100,000 a year who loses 280 bucks on a stock deal. I figured I had better stories to cover.
To me, the real issue here is whether the agency should be investing in corporate stock at all, particularly given the composition of the agency’s board.
Most of us who invest, buy stock in a company and hope for the best. We don’t have the ability, in most cases, to jigger the playing field to help boost our investment. But the IRRR board is comprised of some very powerful politicians, and they have, on occasion, pushed changes in state policy that have aided companies in which the agency has invested. And that’s the real problem here.
With investment, inevitably, comes a certain lack of objectivity. That’s why I don’t invest in local companies on which I might have to report, even if I think they might be sound investments. Doing so automatically puts you on the side of the company, and that could easily affect one’s editorial judgment.
That is the opening several paragraphs, and it really makes sense to me. Read the balance of it online, again, here; but let's post the short closing paragraph:
It’s hard to argue that the regulatory authorities of the state will adequately oversee projects with significant environmental impacts, and the potential for catastrophic effects, when we have lawmakers and state agencies, like the IRRRB, directly invested in the companies at issue. If the agency wants to forge a silver lining from its disappointing investment in Duluth Metals, it would adopt a policy prohibiting such investments in the future.
Put another way, cap that brand of stuff. It's counterproductive to be wasting money, and in parallel it is counterproductive to public trust statewide, to see such conflicted positions - we buy in, we regulate, we want it, we know only one tune, "Jobs, jobs, jobs, jobs, jobs," and it is hell to pay for any environmental depredation, since a few hundred Rahge jobs might be at stake - so damn the torpedoes full speed ahead. Is that dumb thinking for our state's officials, or not?