Minnesota braces for legal fight over PolyMet mine decisions

A top state official said Wednesday he was finalizing plans for retaining an outside law firm to handle lawsuits stemming from PolyMet Mining Corp.'s proposal to build a copper-nickel mine in northeastern Minnesota, which is expected to be challenged regardless of whether state regulators approve the project's needed permits.

Minnesota Management and Budget Commissioner Myron Frans told The Associated Press that his agency was finalizing an agreement with Washington-based Crowell and Moring, which has a unit specializing in mining and natural resources. The firm will draw from the $750,000 that lawmakers agreed to set aside for legal fees related to the project over the next two years, but the eventual bill could top $1 million.

PolyMet Mining needs permits to open a $500 million-plus mine, which supporters say will bring needed jobs to the region but environmentalists say will lead to water contamination. After 10 years of consideration, state regulators are expected to confront decisions on multiple permits next year for the mine.

"We assume either way there could be lawsuits if a permit is granted or is denied," Frans said. "We want to make sure we have the talent and expertise available."

State officials say legal fees will range from $200 to $400 per hour, which they said is below normal rates charged by the firm. A spokesperson for the firm, whose clients have included the National Mining Association, didn't immediately return an email seeking comment.

Frans noted that lawmakers made an educated guess when appropriating money designed for the mining project, which the state budget referred to only as related to legal costs associated with water management. Frans and the attorney general's office notified top legislators before entering into the contract under a law requiring consultation when eventual costs "can reasonably be expected to exceed $1 million."

"It could be way more than enough or it might not be sufficient," Frans said.

The project has drawn intense opposition from environmental groups, which argue that PolyMet's method for extracting the valuable minerals could lead to water contamination from mercury and sulfate discharges.

Project backers argue that adequate safeguards were built into the proposal. An extensive environmental impact study by state and federal officials determined the project would meet standards for protecting environmental and human health.

One of the lawmakers Frans consulted about the law firm contract was Republican Rep. Denny McNamara, chairman of the House Environment and Natural Resources Committee. McNamara said Wednesday he agrees with bringing in legal experts to deal with an extremely specialized area of law.

"It's my anticipation we will be signing off on that by next week, unless there is a snag that I'm not aware of at this time," McNamara said.

Even if members of the Legislative Advisory Commission object, the state can sign the contract 20 days after lawmakers were consulted. That gives officials power to sign the deal on Dec. 11, if it isn't in place sooner.

Separately, Frans said the state will soon advertise for a consultant to examine financial aspects of PolyMet's proposal. That includes fashioning a so-called financial assurance package the mining company would have to pledge for long-term reclamation and cleanup. Frans said costs for the financial assurance adviser would be borne by PolyMet.