US Steel's $300M Keetac mine expansion up for vote

By STEVE KARNOWSKI, Associated Press

ST. PAUL, Minn. (AP) - United States Steel Corp. will clear one of its last regulatory hurdles for the planned $300 million expansion of its taconite mine and processing plant in Keewatin if a state board approves two key water quality permits Tuesday.

The expansion would increase annual capacity of the Keetac plant to 9.6 million tons of iron ore pellets, up from its present 6 million tons, add 120 permanent jobs and create about 500 temporary construction jobs, U.S. Steel spokeswoman Courtney Boone said Friday.

U.S. Steel announced plans back in February 2008 for the project, which will include a restart of a pellet production line that has been idle since 1980. Environmentalists argued as the regulatory process unfolded that the proposed permits didn't do enough to restrict discharges of sulfates that could damage stands of wild rice, or of mercury that could contaminate fish downstream from the plant on northern Minnesota's Iron Range.

Environmentalists say the permits that will go before the Minnesota Pollution Control Agency Citizens Board aren't perfect but that they're an improvement thanks to pressure from environmental groups, tribal governments and other concerned citizens. U.S. Steel insists the project is ecologically sound.

"The environmental controls contained within the permits are state-of-the-art controls," Boone said.

State law limits sulfate discharges into waters where wild rice grows to no more than 10 milligrams of sulfates per liter. Wild rice, a Minnesota delicacy, is sacred to the state's American Indians but it's sensitive to sulfate levels. The permits require the facility to comply with the 10 milligram standard by Aug. 17, 2019.

MPCA and U.S. Steel documents obtained by The Associated Press under the state's Data Practices Act show Keetac's current sulfate discharges exceed the state standard, yet some of the lakes and streams that receive those discharges still support healthy wild rice stands.

"It is absolutely clear the MPCA is going to enforce the sulfate standard. That's a pretty big accomplishment," said Paula Maccabee, an attorney for WaterLegacy. She said the assurance is especially important because of efforts made by the mining industry at the Legislature last session to loosen the sulfate standard

The federal Environmental Protection Agency also pushed for tighter permit requirements. Correspondence between the MPCA and EPA, obtained under the Data Practices Act, shows the two agencies were going back and forth over changes as recently as last month, and that the EPA warned that it might object to issuance of the permits if its concerns weren't addressed.

The MPCA agreed to many changes the EPA sought, including clarifications on compliance deadlines, though it balked at the EPAs suggestion that the state upload its Keetac discharge monitoring reports and other compliance documents on the mine into a public EPA database. The EPA cited the "significant public interest in this facility" and the permit process. The MPCA replied that it recognizes the public interest, but that all public information on the permits and U.S. Steel's compliance with them is available for inspection and copying at the agency.

Given that public interest, Maccabee said she hopes the Citizens Board reconsiders so that anyone with access to a computer can download the information for free, saving the agency the staff time and expense of responding to Freedom of Information requests.

One of the two water quality permits at issue deals with the overall mine area; the other covers discharges from its tailings basin, which flow into the Mississippi River watershed. Agency documents also show that stormwater runoff that may contain traces of mercury could reach the nearby Lake Superior watershed.

The board last month approved a new air permit for the upgraded plant, which has had problems with airborne mercury emissions. Environmental groups said the final air permit lacked sufficient guarantees that U.S. Steel's plans for reducing them will work. Maccabee said she also still questions the adequacy of the mercury rules in the water permits.

"Mercury in fish is a human health issue and they need to take it more seriously," she said.

Keetac also still needs a wetlands permit from the U.S. Army Corps of Engineers. Jill Clancy, a biologist with the Corps who's working on the project, said it's not clear how long that process will take.

Boone declined to estimate when U.S. Steel might finally begin the expansion, saying it will require final approval from the company's board of directors after all permits are issued.

MPCA files show several elected officials are urging the MPCA board to support the expansion because of the new jobs it would create. U.S. Steel already employs about 1,600 Minnesotans between Keetac and its separate Minntac operation in Mountain Iron.

A letter from Iron Range legislators said the project would "ensure the long-term stability of their operations and help make them more competitive in the global marketplace."

(Copyright 2011 by The Associated Press. All Rights Reserved.)