PolyMet joins forces with Canadian company
Together with Teck Resources, the venture will operate as NewRange Copper Nickel in efforts to further develop mineral holdings and bring on-line the Iron Range's first precious metals mine.
HOYT LAKES, Minnesota — A pair of operations with nearly half of the known copper-nickel holdings on the Iron Range joined forces Wednesday, when Minnesota-based PolyMet and Canadian-owned Teck Resources announced a joint venture, NewRange Copper Nickel.
The agreement will place each companies' copper, nickel, cobalt and platinum resources under single management, with plans to further develop PolyMet’s proposed first copper-nickel mine on the Iron Range, referred to as the NorthMet mine.
Teck’s holdings are tied up in what is known as the Mesaba Project. The resources measured to date between the parties consist of 795 million tons for NorthMet, and 1,740 million tons for Mesaba, with combined estimated resources almost double that.
As part of the deal, Swiss mining giant Glencore will retain its majority equity interest in PolyMet.
Jon Cherry, PolyMet chairman, president and CEO, hailed the news as the creation of a global leader in Minnesota, one that he said was capable of delivering a supply chain for clean energy technologies.
“This extraordinary venture links the expertise, experience and financial resources of PolyMet, Teck and Glencore to develop the NorthMet mine when the remaining permit proceedings are complete, and study the mine development options for Mesaba,” said Cherry in a news release Wednesday. “The total assets of the NorthMet and Mesaba deposits make this one of the largest clean-energy mineral resources in the U.S. and globally.”
As part of the deal, Glencore committed to funding PolyMet’s portion of costs and expenses up to $105 million, said the news release.
Cherry noted what he called “synergies” created by joining forces. Also, independent financial advisers sought by PolyMet reportedly said the transaction would be "fair" from a financial point of view. Cherry cited Teck’s strong balance sheet.
“This joint venture will benefit all our shareholders,” Cherry said. “The successful completion of this transaction is expected to more than double the resources attributable to PolyMet shareholders.”
The transaction was unanimously approved by the PolyMet board.
PolyMet is in the process of bringing its proposed mine through federal and state environmental review processes and a federal land exchange. The NorthMet mine has received nearly two dozen state and federal permits necessary to build and operate a 32,000 tons-per-day mine and processing facility outside Hoyt Lakes. Three permits are pending final resolution to reach project approval, the company said.
According to the news release, Teck’s Mesaba Project is progressing baseline environmental studies, resource definition and mineral processing studies.
“Further studies and community and tribal consultation will be required to fully define long-term development potential,” the news release said.