Questions over whether the state is demanding the highest possible environmental and safety standards in the rebirth of a 1950s-era tailings dam are growing more urgent just as Minnesota's first proposed copper nickel mine is reaching the final stage of regulatory approval.

Throughout the last decade of environmental review and bitter debate, the $1 billion project by PolyMet Mining Co. has always been anchored to a 2.5-square-mile taconite basin near Hoyt Lakes that would eventually hold hundreds of millions of tons of ore processing waste — perhaps for centuries.

Environmental groups, which have long argued that the design is risky, have now made it a primary focus of their request for a legal review of the project that is now awaiting a decision by state officials. They cite internal state documents that show that the Department of Natural Resources' consultants and staff have expressed recurring concerns about the long-term costs and failure risks of the massive earthen structure, and that there could be better options.

Debate over environmental standards also is taking on even greater urgency in the wake of a recent financial filing from PolyMet. In it, company officials told investors that the project's biggest profits would lie in eventually tripling the size of the mine. And that would triple the amount of the waste.

The proposed permit for the tailings basin and the much larger permit to mine for the entire project are now under final review by DNR officials. If approved, the company said it hopes to finalize the remaining federal permits and start construction later this year.

DNR officials say they have given the tailings basin an exhaustive environmental review and that its design has been significantly improved over time.

The PolyMet mine in Hoyt Lakes, Minn.

It "would meet the standards in state law … is protective of the environment and public safety, and represents a reasonable balancing of the many important factors we must consider," said DNR assistant commissioner Barb Naramore.

PolyMet officials say the tailings basin has always been integral to the project's design, and is part of what makes it financially feasible. The company will not expand the mine in the future, they said, without further environmental review that might result in a completely different kind of waste storage.

Environmental groups are disputing the state's conclusion. They point to internal DNR documents they obtained through public records requests.

The DNR was told by expert engineers "that the failure of this dam was probable or even inevitable over its life," said Aaron Klemz, communications director of the Minnesota Center for Environmental Advocacy (MCEA), a nonprofit law firm that reviewed the DNR documents. Any future expansion of the mine and the tailings basin would "increase that risk dramatically," said Kevin Lee, an attorney with the organization.

Greater risks

PolyMet's NorthMet project was born out the bankruptcy of a previous mine, the old LTV taconite facility near Hoyt Lakes, which was built in the 1950s. PolyMet acquired the assets — a massive rock crushing facility, a railroad line, 4 square miles of tailings pits — and the responsibility to take care of the legacy pollutants left behind by LTV.

PolyMet officials say it is an ideal solution for an old mine site, making the project financially viable while reducing the overall project footprint by re-purposing the facilities.

"That's critical for environmental impacts," said Brad Moore, PolyMet's vice president for environmental affairs. "You keep them where they are already present."

PolyMet doesn't plan to mine taconite. It would be the first to mine copper, nickel and other precious metals from a massive, untouched deposit east of the Iron Range, creating 300 jobs. That kind of mining carries substantially greater risks than taconite, because the waste rock can produce acid that leaches heavy metals from the ground, threatening local lakes and rivers.

The tailings pit, environmentalists say, presents a more dramatic kind of risk: failure. It would eventually hold 225 million tons of mine waste, including heavy metals and other pollutants, capped by 8 feet of water behind earthen dams that would gradually rise to a height of 250 feet — and require maintenance for decades to prevent erosion and collapse.

Moore said the tailings basin is safe, and that PolyMet's engineers are planning improvements, including a rock buttress at the base, that would make it even safer.

Moore also pointed out that without PolyMet, Minnesota would somehow have to maintain the old tailings dam indefinitely. With PolyMet, he said, the dam structure would be more sound and the water from the pit will be collected and treated to meet water quality standards, he said.

Other alternatives

A series of catastrophic dam failures at other mines around the world are forcing the industry and regulators to consider alternatives. In 2014, a dam at a mine site in British Columbia burst, releasing a billion gallons of contaminated slurry into forested wilderness. A year later, a dam failure at an iron mine in Brazil killed 11 people, with 12 more listed as missing.

The proposed PolyMet tailings basin presents similar long-term risks of failure, according to internal DNR e-mails and memos obtained by the MCEA, some which were provided recently and only after a request for a contested case hearing was filed, Klemz said.

In 2012, Don Sutton, a mining engineer from Spectrum Engineering hired to help assess financial protections for the state, wrote in a memo to the DNR that the design will require permanent long-term maintenance. "Who will do this?" he asked. "PolyMet is proposing to build a tailings disposal system that has the lowest initial cost, but has more long-term risks than other tailings disposal methods."

Sutton expressed the same concern repeatedly in subsequent memos and e-mails, and as recently as 2017 he said the tailings basin "gives me severe indigestion because a lake on top of sand is inherently unstable, and irresponsible."

His concerns were echoed by DNR dam safety engineer Dana Dostert, who sent an e-mail last year raising the issues of stability and long-term closure.

Naramore said that Sutton was not hired to assess dam safety. The consultants and staff who were — including an outside expert who reviewed the dam failure in British Columbia — signed off on the proposed tailings dam, she said.

Permit documents show that the dam safety review team assembled by the DNR agreed that a tailings basin "will be more difficult and costly to manage for the long-term, and it must be determined if this commitment is acceptable." The alternative favored by environmental groups and Sutton — in which mine waste is dried until it resembles sand and then covered — would have lower long-term costs and lower environmental risks, they said. But they were not ready to commit to it, they said.

Instead, they recommended that the state require PolyMet to "continually review" the dry storage alternative once the mine is up and running.

"The draft dam safety permit," Naramore said, "reflects design adjustments and conditions DNR developed in response to these independent experts' recommendations." And, she added, a $1 billion fund of financial protections required by the state would suffice to cover the costs of cleaning up a tailings dam failure.

Nonetheless, environmental advocates say the dry storage alternative would give Minnesotans greater peace of mind, and would meet what is now viewed as the best industry practice.

"It eliminates potential for catastrophic dam failure, and it reduces the risk of [water] contamination," said Paula Maccabee of WaterLegacy.

The tailings dam debate is now at the core of two requests from environmental groups that the DNR submit its permit decisions to legal review by an administrative law judge. The DNR hasn't decided whether to grant the request.

Josephine Marcotty • 612-673-7394