Fred S. Childers Sr., a prospector from Ely, Minn., notices a copper stain in a small pit that had been blasted for construction of a nearby Forest Service road. He is near Spruce Road, nearly nine miles southeast of Ely. He begins searching nearby outcroppings, enlisting the help of Roger V. Witeside, of Duluth.
Rich in minerals, rich in history
Our NorthMet ore body is located immediately south of Northshore Mining’s active Peter Mitchell iron ore mine, on the eastern end of the Mesabi Iron Range in northeastern Minnesota in a geologic formation known as the Duluth Complex. NorthMet is one of several known but undeveloped copper-nickel-platinum-group-metals (PGM) deposits along the northern margin of the complex.
Although in close proximity, the Duluth Complex is a completely separate geologic formation from the ore found in the Mesabi Iron Range, where Northshore and other iron mining operations are found.
Iron mining on the Range dates back to the 1880s when high-grade iron ore known as hematite was first mined commercially. For more than a century, the Iron Range has been a major source of raw materials for the nation’s steel industry. It wasn’t until the 1940s that copper was discovered nearby (and later, other minerals). Only in recent years has it become practical to commercially mine these minerals.
PolyMet would be the first in Minnesota to bring these metals to market.
With an initial hole drilled 188 feet deep, exploration drilling begins in the proximity of Childers’ earlier find. Rich mineralized zones of copper and nickel are found in what becomes known as the Duluth Complex.
With reserves of hematite dwindling, the iron industry begins to focus on taconite, a lower-grade iron ore. The first two of eventually eight large crushing, grinding, milling and pelletizing facilities are built along the Iron Range by various iron and steel companies to process taconite.
Erie Mining Company begins construction on the Erie Plant, rail line, power plant and harbor, and the nearby community of Hoyt Lakes. The $300-million complex is built to process and ship taconite. (The company completes a $50 million expansion of the facility in 1967.)
The Erie Plant begins operation and produces 7.5 million tons of taconite pellets per year. Capacity increases to 10.3 million tons in 1967 and the plant processes a record 13.1 million tons in 1973.
United States Steel Corporation conducts exploratory drilling and discovers what is now the NorthMet deposit. (The location is nearly 20 miles southwest of Childers’ original discovery in 1948.) U.S. Steel investigates the deposit as a high-grade, underground copper-nickel resource.
Eight major exploration programs are conducted on the deposit through the years, with more than 400 holes drilled and extensive assaying conducted. Additional information about the NorthMet ore body is collected from nearby hydrogeological studies, water supply wells, test pits and geophysical soundings.
Environmental protection takes center stage in the U.S. as the Environmental Protection Agency is established and the National Environmental Policy Act, Clean Air Act and Clean Water Act are signed into law. The increasing awareness of man’s impact on the environment leads to development of pollution-controlling technologies in automobiles and factories, including the catalytic converter for automobiles. Prior to the development of the catalytic converter, there was little market for platinum group metals and no economic and reliable method to assay for low grades of these metals.
Fleck Resources Ltd., a privately held exploration company (later to be renamed PolyMet), is incorporated March 4, in Vancouver, B.C.
Fleck stock begins publicly trading on the Vancouver Stock Exchange.
Platinum Group Metals are discovered in the Duluth Complex. Awareness of the substantial PGM potential of the Duluth Complex increases during this period.
LTV Corporation acquires 100 percent ownership of the Erie complex and renames the facility LTV Steel Mining Company.
The Minnesota Natural Resources Research Institute (NRRI) publishes data suggesting the possibility of a large resource of PGMs in the base of the Duluth Complex.
Fleck enters into a 20-year perpetually renewable mineral lease to the NorthMet resource (also known as the Dunka Road Deposit) with USX Corporation, parent to U.S. Steel.
The company begins to re-assay drill cuttings (pulps and rejects) from the previous U.S. Steel drill holes to identify and quantify possible PGM values. This effort continues into the 1990s.
The company investigates the use of alternative metallurgical processes.
A new management team takes over. Fleck changes its name to Poly Met Mining, Inc., commonly spelled PolyMet.
The company focuses on hydrometallurgical technology, a process that uses autoclaves – vessels operating at high temperature, high pressure, and in an oxygen-enriched environment – to oxidize the metallic minerals and leach the metals therein. Developed in the 1950s, the process has been used commercially in the copper, nickel, cobalt, and gold mining industries since the 1980s.
In July, PolyMet enters into a joint venture arrangement with North Limited, a major Australian mining company, to advance the PolyMet project (which does not yet include the former LTV Steel site) to commercial production.
In August, London-based Rio Tinto Limited acquires North. Subsequently, Rio Tinto decides not to proceed with the project. As a result, PolyMet regains 100 percent interest in the NorthMet project.
PolyMet commissions a pre-feasibility study on the project that is completed in April the following year. The pre-feasibility study contemplates a 55,000-ton-per-day open-pit operation and anticipates the construction of a new, stand-alone processing plant to produce copper, nickel and cobalt metals on site.
LTV Steel declares bankruptcy and about 1,400 workers are laid off. (At the time, the mill is the oldest continuously operating taconite operation on the Minnesota Iron Range.) The closure is a severe economic blow to Hoyt Lakes and the region.
PolyMet completes a pre-feasibility study that assumes a ‘greenfield’ project with a new plant and tailings basin to the south of the deposit. However, the study finds the economics of the project are unacceptably low owing to the capital cost of building a new plant combined with prevailing low metal prices.
Cleveland Cliffs reaches agreement with LTV Steel Mining Company to purchase out of bankruptcy some of the LTV assets including all the mine-related real estate, the taconite mill and processing facilities, rail line and loading dock, and assume certain environmental liabilities.
Under new leadership, PolyMet commences a detailed review of the project. The team recognizes that acquisition of the idle LTV Steel facility located only about six miles from the NorthMet ore body and now held by Cleveland-Cliffs, would substantially reduce the capital cost of the project.
The company secures an option to buy the core of the former LTV site from Cleveland-Cliffs (now called Cliffs Natural Resources Inc.) that includes property, plant and equipment. The company pays $500,000 and issues Cliffs 1,000,000 common shares of PolyMet stock valued at about $229,000.
The company exercises its option to purchase the former LTV site and associated property and equipment in a stock and equity deal, paying $1 million cash and 6,200,547 common shares valued at $7.564 million, and $2.4 million paid in quarterly cash installments through June 2008 to Cliffs. The deal closes November 15.
In October, the Minnesota Department of Natural Resources publishes its Environmental Assessment Worksheet Decision Document establishing the DNR as the lead state agency and the U.S. Army Corps of Engineers as the lead federal agency for preparation of the Environmental Impact Statement in accordance with the National Environmental Policy Act and the Minnesota Environmental Policy Act. (The U.S. Forest Service was added as a co-lead agency in October 2010.) For a complete timeline and status of this process, see Environmental Review and Permitting Status.
The company purchases additional land (6,000 acres), a railroad connection and associated equipment and infrastructure, other facilities and associated rights from Cliffs for two million common shares valued at $6.16 million and $15 million in cash payable in two notes, each for $7 million.
From the 2005 and 2006 Cliff acquisitions, the company’s new holdings include crushing and milling equipment (the Erie Plant), plant site buildings, tailings basin and workshops, extensive spare parts, railroad connection to the site of the NorthMet ore body, 120-railcar fleet, and locomotive fueling and maintenance facilities. Also included are water rights and pipelines, large administrative offices on site and approximately 6,000 acres to the east and west of and contiguous to our existing tailings facilities and other real estate. Certain liabilities associated with the property also are assumed.
PolyMet stock is listed on the American Stock Exchange (now the NYSE MKT) June 26, under the symbol PLM.
The company transitions to a development stage entity following the completion of the Definitive Feasibility Study. Conducted by consultants Bateman Engineering Pty Ltd, the study establishes reserves for the first time and confirms the economic and technical viability of the PolyMet Mining NorthMet Project. The study shows Proven and Probable Reserves of 181.7 million tons grading .31 percent copper, .09 percent nickel, .008 cobalt and .01 ounces per ton of precious metals.
Upon completion of additional drilling between 2006 and 2007, the project’s mineral reserve estimates are expanded and the company reports Proven and Probable Reserves of 274.7 million tons grading at .28 percent copper, .08 percent nickel, .008 percent cobalt and .010 ounces per ton precious metals.
Operations are established at the former Erie plant site facilities in Hoyt Lakes.
Global mining conglomerate Glencore enters into an agreement with PolyMet resulting in its investment of $25 million into the company through a convertible loan and a commitment to purchase future production of concentrates at prevailing market terms. The transaction provides much needed funding for project engineering and procurement.
The draft EIS is published in November by the DNR and USACE and undergoes a public comment period.
In February the U.S. Environmental Protection Agency (EPA) rates the draft EIS as EU3 (Environmentally Unacceptable) and recommends changes. Work begins on a supplemental draft EIS. Joining the review are the U.S. Forest Service as a co-lead agency and the EPA as a consulting agency. (EPA later becomes a cooperating agency in June 2011.)
PolyMet agrees to sell in a private placement $30 million of common shares to Glencore in three tranches between November 2010 and October 2012. This increases its ownership to approximately 15 percent of outstanding shares and 18 percent on a fully diluted basis.
PolyMet Mining announces plans to build the project in two phases. In the first phase, the company will produce and market two metal concentrates: one containing copper and gold and the other containing nickel, platinum, PGMs and cobalt. In the second phase a hydrometallurgical plant will be built, funded in part from sales of concentrate produced in the first phase. The hydromet facility will process nickel concentrate through a single autoclave, resulting in production and sale of high-grade copper concentrate, value added nickel-cobalt hydroxide, and precious-metals precipitate products.
The company establishes executive offices in St. Paul, Minn., while the operations remain in Hoyt Lakes.
The company agrees to sell in a private placement $20 million in common shares to Glencore. This increases their ownership to approximately 27 percent of outstanding shares and 34 percent on a fully diluted basis.
The company relocates its corporate office from Richmond, B.C. to Toronto, Ont., a financial center for mining.
Jon Cherry, an environmental engineer with more than twenty years of mining experience, joins PolyMet Mining as its president and CEO to lead the project through completion of the environmental review and permitting stages and development and operation of the mine.
On April 10, PolyMet Mining announces an offering of rights to holders of common shares of the company to raise up to $60 million in gross proceeds to complete the environmental review and permitting process and fund engineering costs, equipment purchases and other costs. The rights offering is popular with investors: the company receives subscriptions totaling $95.5 million. Glencore purchases approximately $21 million of common shares in the rights offering. With the purchase, Glencore’s ownership in common shares now represents about 29 percent of outstanding shares and 34 percent on a fully diluted basis.
Dec. 6, the Minnesota DNR, USACE and USFS publish the supplemental draft Environmental Impact Statement for the project and commence a 90-day public comment period.
March 11, the EPA rates the supplemental draft EIS as EC-2 (Environmental Concerns), one of the highest ratings the agency gives to projects of this type, and commends the company for the environmental improvements it made to the project.
March 11, 2014, the EPA rates the supplemental draft EIS as EC-2 (Environmental Concerns), one of the highest ratings the agency gives to projects of this type, and commends the company for the environmental improvements it made to the project.