EVELETH, Minnesota – Iron Range Resources and Rehabilitation Board (IRRRB) Commissioner Tony Sertich announced today that a $4 million loan to PolyMet Mining, Inc., will be considered by the IRRRB at its 1:30 p.m., Friday, April 15, 2011, board meeting at IRRRB headquarters in Eveleth.
The loan will assist PolyMet in the acquisition of a 5,272 acre tract of land near Biwabik and a 32 acre tract of land near McFarland Lake in Cook County. PolyMet plans to exchange the two tracts with the U.S. Forest Service for lands at the site of its proposed NorthMet non-ferrous mining facility near Hoyt Lakes. As additional consideration for the loan, PolyMet will issue warrants for 400,000 shares of common stock that could be exercised by the IRRRB for $2.50 per share within one year after PolyMet receives all necessary approvals to commence mining operations.
In December 2010, the IRRRB approved a $4 million loan to PolyMet for the same purposes. None of those loan funds were disbursed to PolyMet. In January, a lawsuit was filed against the IRRRB, seeking to prevent the loan to PolyMet.
Environmental permitting legislation approved by the 2011 Minnesota Legislature and signed by Governor Mark Dayton on March 3, 2011, clarifies the IRRRB’s role as an economic development agency, confirming the IRRRB’s ability to provide early-stage financial support for economic development projects in northeastern Minnesota. The lawsuit was dropped in late March.
“PolyMet is a promising job and revenue-producing project,” said Sertich. “Our agency’s participation in this development is another instance of the DJJ Trust fund being utilized to grow jobs within the region and generate new revenue for the state.”
PolyMet’s non-ferrous mining project is projected to create hundreds of construction jobs, approximately 360 permanent jobs, 500 spin-off jobs, and generate tens of millions of dollars annually in new tax revenue to local municipalities, the state, and federal government.
The proposal before the IRRRB stipulates that should PolyMet not commence the land exchange, they would transfer the titles of the two tracts of land to the IRRRB for future development opportunities.
The project will still need approval from other state agencies and meet both state and federal environmental protection standards to begin mining.
The $4 million loan would come from the corpus of the Douglas J. Johnson Economic Protection Trust Fund (DJJ Fund). The DJJ Fund is designed to provide financial assistance for projects that stimulate employment and encourage diversification of northeastern Minnesota’s economy. Approval of funding from the DJJ Fund corpus requires 10 votes of the 13-member Iron Range Resources and Rehabilitation Board.
Iron Range Resources & Rehabilitation Board (IRRRB) is a state economic development agency headquartered in Northeastern Minnesota whose vision is to promote and invest in business, community and workforce development for the betterment of the region.