Round 3: Environmental groups file another suit over 'sweetheart' PolyMet deal

Environmental groups have filed a third lawsuit against the U.S. Forest Service, attempting to overturn the agency's January approval of a land exchange with PolyMet, a key step in the company's bid to open the state's first copper-nickel mine.

The suit alleges the Superior National Forest illegally undervalued the land it agreed to swap with PolyMet. It was filed in U.S. District Court in St. Paul by the Center for Environmental Advocacy, the Center for Biological Diversity and the W.J. McCabe Chapter of the Izaak Walton League.

The deal calls for the Forest Service to convey 6,650 acres of federal land to PolyMet that the company needs to build the mine. PolyMet owns the mineral rights underneath that land, but not the surface rights the Forest Service contends the company needs to dig an open pit mine.

In exchange, the Forest Service would acquire 6,690 acres of non-federal land scattered across northeast Minnesota.

The Forest Service valued its land at $550 per acre. But the lawsuit contends the agency directed the appraiser not to take the value of the minerals underneath the land into account when it valued it, instead appraising the land for the value of its timber.

"The PolyMet land deal is a bad deal for taxpayers," Kathryn Hoffman, MCEA executive director, said in a statement. "$550 per acre is a fraction of the value this land has for PolyMet's mine proposal. Taxpayers deserve fair treatment, not this sweetheart deal for PolyMet."

In a statement, PolyMet said it has "confidence in the Forest Service appraisals, which followed well-established federal guidelines by the U.S. Department of Justice. After years of review and analysis, the Forest Service has determined the land exchange best serves the public's interest."

This lawsuit follows a similar action filed in late January by the environmental group WaterLegacy, which also charged the Forest Service with giving a "sweetheart deal" to PolyMet.

That environmental group said the Forest Service failed to take into account recent sales of private land in northeast Minnesota to mining companies that averaged $1,645 an acre.

Conservation groups have also challenged the land exchange on the grounds that it threatened habitat for endangered lynx and wolves.

PolyMet is seeking to become the first company to open a mine for copper, nickel and precious metals in Minnesota, near the towns of Hoyt Lakes and Babbitt.

The Canadian company has applied for more than 20 permits from local, state and federal regulators, including its Permit to Mine application from the Minnesota Department of Natural Resources, which it filed last November.

If the company eventually receives final permits, construction of the mine is expected to last about two years.