A coalition of environmental groups have asked Minnesota Attorney General Keith Ellison to investigate whether PolyMet, the company looking to build the first copper-nickel mine in Minnesota, misrepresented its relationship with Glencore, the Swiss mining giant that recently became the majority shareholder of PolyMet, when applying for key permits.
In a letter Monday, Steve Morse of the Minnesota Environmental Partnership and 24 other environmental groups urged Ellison to evaluate Glencore becoming the majority shareholder of PolyMet because it happened after PolyMet was fully permitted, leaving Glencore off the permits and the financial assurance package meant to ensure the state could reclaim and close the mine and plant sites if PolyMet closed unexpectedly.
"We are concerned that this recent change in ownership has long been planned, and that Glencore remained a 'background player' during the permitting process to avoid scrutiny by the State," Morse wrote.
Morse called Glencore "an international bad actor."
The U.S. Commodity Futures Trading Commission is investigating Glencore for alleged corrupt practices and the Justice Department has subpoenaed Glencore for alleged money laundering and possible corruption .
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PolyMet is the first fully permitted copper-nickel mine in Minnesota and is hoping to build its mine and processing plant near Hoyt Lakes and Babbitt, but still needs to raise almost $1 billion in financing for the project.
In a statement Monday evening, Ellison said his office has started looking into the issue after receiving the letter.
“Whenever Minnesotans bring issues that are important to them to my office, we listen, we take them seriously, and we look into them. That’s what we’ve started to do in this case," Ellison said.
Glencore took the majority shares in PolyMet last month after a rights offering cleared over $240 million in debt PolyMet owned to Glencore. The rights offering allowed shareholders to purchase additional shares at a discounted rate and used the proceeds to pay off the debt.
After the rights offering, Glencore's ownership in PolyMet shares jumped from 29% to 72%.
PolyMet spokesperson Bruce Richardson characterized the letter sent by environmental groups Monday as an effort to derail the project.
"This is just one more in a long string of attempts by environmental groups to stop the PolyMet Project," Richardson said in an email. "As a publicly traded corporation, PolyMet has met all of its financial disclosure obligations in addition to its environmental regulatory commitments."
Opponents of PolyMet argue the project could send tainted runoff into the St. Louis River watershed and Lake Superior while supporters say the project would bring much-needed jobs to the region.
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PolyMet, a Canadian mining company, first officially proposed the project in 2004, but it has been under consideration since 1999.
Without other operations and no income until it starts mining, PolyMet has relied on loans and stocks to fund it through the regulatory process.
For the last 11 years, PolyMet has borrowed almost exclusively from Glencore, beginning in 2008 with a $25 million loan. During those 11 years PolyMet took only one non-Glencore loan: a $4 million loan from the Iron Range Resource and Rehabilitation Board in 2011 used to fund PolyMet's land exchange.
