A former iron ore processing plant near Hoyt Lakes, Minn., that would become part of a proposed PolyMet copper-nickel mine, pictured in 2016.Jim Mone/The Associated Press
Swiss commodities giant Glencore GLNCY moved Monday to take full ownership of PolyMet Mining POM-T, a company that’s developing a copper-nickel mine in northeastern Minnesota with one of Canada’s largest miners, Teck Resources TECK-B-T.
Glencore already owns 82 per cent of PolyMet Mining and has long been the project’s main financial backer. It offered Monday to pay around US$71 million to raise that stake to 100 per cent, which would take St. Paul-headquartered PolyMet private. Glencore’s proposal represents around a 167 per cent premium over PolyMet’s closing stock price on Friday, and shares surged on the news in Monday’s trading.
PolyMet Mining said in a statement that it “welcomes the engagement with Glencore” and that its directors are reviewing the proposal but have made no decisions yet.
The proposed mining project, a 50-50 joint venture with Teck, was renamed NewRange Copper Nickel in February but is still widely known as PolyMet. It seeks to be Minnesota’s first copper-nickel mine, but it has long been stalled by court and regulatory setbacks.
The latest came last month when the U.S. Army Corps of Engineers revoked a critical water quality permit. The Corps said the permit did not comply with the water quality standards set by the Fond du Lac Band of Lake Superior Chippewa, whose reservation on the St. Louis River is downstream from the mine and processing plant sites near Babbitt and Hoyt Lakes.
The project has long been criticized by environmental and tribal groups for its potential impacts on water resources, but it has also come under increasing fire in recent months from former governor Arne Carlson, a Republican who served from 1991-99. In addition to the risks to water quality, Mr. Carlson has sounded the alarm about the influence of big mining corporations on Minnesota politics.
Mr. Carlson questions whether the state should even be engaged with Glencore, given the company’s record elsewhere. Glencore reached a deal with authorities in the U.S., Britain and Brazil last year to resolve corruption and market manipulation allegations in return for penalties totalling up to US$1.5 billion.
Glencore also offered to buy Teck’s steelmaking coal business last month, after Teck rebuffed its offer for a full takeover.