March 13, Michael Jimenez Minerals NEPA Project Manager Superior National Forest 8901 Grand Avenue Place Duluth, MN 55808

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1 March 13, 2014 Michael Jimenez Minerals NEPA Project Manager Superior National Forest 8901 Grand Avenue Place Duluth, MN Doug Bruner Project Manager United States Army Corps of Engineers, St. Paul District 190 Fifth St. East St. Paul, MN Lisa Fey EIS Project Manager Environmental Policy and Review Division of Ecological Services 500 Lafayette Road St. Paul, MN Mr. Jimenez, Mr. Bruner and Ms. Fey, Enclosed please find the comments of Great Lakes Indian Fish and Wildlife Commission (GLIFWC) staff on the Supplemental Draft Environmental Impact Statement (SDEIS) for the proposed PolyMet project. GLIFWC is an intertribal agency exercising delegated authority from 11 federally recognized Ojibwe (or Chippewa) tribes in Wisconsin, Michigan and Minnesota. 1 1 GLIFWC member tribes are: in Wisconsin -- the Bad River Band of the Lake Superior Tribe of Chippewa Indians, Lac du Flambeau Band of Lake Superior Chippewa Indians, Lac Courte Oreilles Band of Lake Superior Chippewa Indians, St. Croix Chippewa Indians of Wisconsin, Sokaogon Chippewa Community of the Mole Lake Band, and Red Cliff Band of Lake Superior Chippewa Indians; in Minnesota -- Fond du Lac Chippewa Tribe, and Mille Lacs Band of Chippewa Indians; and in Michigan -- Bay Mills Indian Community, Keweenaw Bay Indian Community, and Lac Vieux Desert Band of Lake Superior Chippewa Indians.

2 Mr. Doug Bruner and Mr. Bill Johnson March 13, 2014 Page 2 Those tribes have reserved hunting, fishing and gathering rights in territories ceded in various treaties with the United States. GLIFWC s mission is to assist its member tribes in the conservation and management of natural resources and to protect habitats and ecosystems that support those resources. As you know, the proposed PolyMet mine is located within the territory ceded in the Treaty of GLIFWC member tribes have expressed concern about the potential impacts of sulfide mining, whether those impacts occur within the 1854 ceded territory, in the 1842 ceded territory, which includes portions of Lake Superior, or the 1837 ceded territory. The following comments are submitted by GLIFWC staff with the explicit understanding that each GLIFWC member tribe or any other tribe may choose to submit comments from its own perspective. Staff remains, as they have for many years, primarily concerned about the scientific validity of the SDEIS with regards to modeling, water quantity, water quality, wetlands, and the assumptions regarding capture efficiencies and long term viability of the engineered structures. Staff also notes that comments and Major Differences of Opinion (MDO) developed for the Predraft Supplemental EIS have not been resolved and remain points of disagreement. Specifically, we are submitting comments on the following topics: Baseflow in the Partridge River Page 1 Discharge from East Berm of Flotation Tailings Basin Page 3 Revised MODFLOW Modeling of Discharge from East Berm Page 7 SDEIS MODFLOW Modeling of Discarded Basin Design Page 10 Perpetual Water Treatment Page 17 Indirect Wetland Impacts Page 19 Seepage Capture Efficiency Page 21 Ability of Goldsim to Accurately Predict Contaminant Concentrations Page 28 Mercury Page 28 Wild Rice Standard Page 28 Alternatives Page 29 No Action Alternative Page 29 Cumulative Effects Page 29 Impacts from Rail Car Spillage Page 30 Loss of High Biodiversity Significance Value Sites Page 30 Financial Assurance Page 31

3 Mr. Doug Bruner and Mr. Bill Johnson March 13, 2014 Page 3 As always, we are willing and available to participate as the lead agencies review and revise the EIS document. Please feel free to contact me or Esteban Chiriboga in GLIFWC s Madison office (608) if you have any questions or need further information. Sincerely, John Coleman GLIFWC Environmental Section Leader Attachments cc. Tamara Cameron, Chief, Regulatory Branch, Army Corps Nancy Schuldt, Fond du Lac Water Projects Coordinator Ken Westlake, USEPA Region 5 Mike Sedlacek, USEPA Region 5 Neil Kmiecik, GLIFWC Biological Services Director Ann McCammon Soltis, GLIFWC Intergovernmental Affairs Director

4 Baseflow in the Partridge River The importance of baseflow in understanding site hydrogeology is hard to overstate. Unfortunately the quality of flow data collected at the Polymet site is poor and fraught with uncertainty. Because there has not been a Polymet stream gage at the site and Northshore pit dewatering has occurred into the Partridge at varying and uncertain times, all flow data from the site is suspect. Simple upstream, at-site, and downstream flow measurement would have provided higher quality data but was never collected by the applicant nor required by the state. There have been several work-arounds to try to overcome the lack of good quality flow data for the site. The latest has been the addition of 1 cubic foot per second (cfs) of flow to the Goldsim modeling to account for Northshore pit dewatering. The mine site water modeling data package very clearly states (SDEIS reference Polymet 2013i, pg 123 & 133) that the 1 cfs added to Goldsim modeling was to account for constituents added to the Partridge by pit dewatering from Northshore; It is not relevant to baseflow calculations nor is it relevant to determination of aquifer conductivity or groundwater travel times. In determination of baseflow, all GLIFWC's calculations have excluded Northshore pumping from the calculation. The Dec. 17th MNDNR memo (Attachment A) also picked a period when pumping for Northshore pit dewatering was not occurring so as to calculate true baseflow. The 1 cfs added to Goldsim modeling of the Partridge, mentioned in various DNR documents, is irrelevant to the calculation of baseflow and does not solve the modeling problems in XP-SWMM, MODFLOW and by extension Goldsim. Some of the implications of incorrect baseflow are highlighted on page 114 of the water modeling data package (March 2013), in our memo of , and in GLIFWC's baseflow summary of (Attachments B, C, and D respectively). Because the implications of baseflow are substantial when it comes to a basic understanding of the mine site hydrogeology, all modeling of flow and by extension contaminant transport must be re-calibrated to the higher baseflow numbers indicated by GLIFWC's analysis 1

5 of (Attachment E) and DNR's analysis (Attachment A). Page 114 of the mine site Water Modeling Data Package makes it clear that re-calibration of the MODFLOW model generates new conductivity values that are then fed into Goldsim. It states: "The revised model calibration resulted in different optimized values for the horizontal hydraulic conductivity of the surficial aquifer and bedrock, which are used to establish the distribution of values used for the probabilistic groundwater flow path modeling (Section )." It is also clear that higher hydraulic conductivities for the aquifers result in faster contaminant transport to points of evaluation. Although baseflow assumptions have significant effects on Goldsim modeling, the implication of re-calibrating the MODFLOW model go beyond the conductivities used in the Goldsim modeling. Higher baseflows imply higher conductivities that imply faster and greater groundwater flow rates. This affects: 1) The amount of water expected to flow into the mine pit as it is excavated. 2) The amount of drawdown of Partridge River flow that can be expected due to pit dewatering. 3) The amount of wetland dewatering that can be expected due to pit dewatering. Given the uncertainty in baseflow numbers due to the poor quality flow data, it is reasonable to re-calibrate the MODFLOW model to a range of values that included the previously assumed baseflow and the newer, higher baseflow numbers. 2

6 Discharge From East Berm of Flotation Tailings Basin: Significance: The contaminant transport analysis at the Flotation Tailings Basin (FTB) does not include any accounting for discharge through the east berm of the basin. There are 3 reasons why discharge through the east berm will be enough to cause environmental concern: 1) the flow distance between the final FTB pond in cell 1E and the exterior of the east berm is relatively short compared to flow distances from the pond to the north and west berms (SDEIS Figure ). 2) the east berm is underlain with feet of conductive surficial material (SDEIS Figure and Figure 2 below). 3) the basin pond level is 1720 ft, the land elevation east of the basin is 1660 ft (Lidar data: The elevation difference between the pond and the adjacent land surface is substantial; 1720 ft ft = 60 ft. Because there has been no prediction of discharge from the east side of the FTB, there was no flow path established or contaminant transport analyzed in the easterly direction. The SDEIS is completely devoid of any mention or analysis of flow from the basin toward the east. Receiving waters for the contaminated discharge would be wetlands adjacent to the basin, Spring Mine Lake, Spring Mine Creek and wetlands to the north if a proposed stormwater drainage swale is constructed. Polymet Modeling of Flow from the Basin: Polymet modeling with MODFLOW (RS13 Attachment A ; RS13B Attachment A ; Polymet 2013j Attachment A 2011), for the FTB has prevented any discharge of basin water to the east by erecting a no-flow boundary at the surface of the berm and at the ground surface. This no-flow boundary is an artificial construct that has no basis in reality. In reality, flow to the east will be controlled by the relative head pressures and the conductivity of the materials in the FTB, beneath the FTB and in the berms. 3

7 Geology Beneath the East Berm: Examination of the geologic data for the site indicates that the east berm of the FTB sits on a bedrock valley filled with surficial material that is 25 to 50 feet deep. The bedrock valley under the east berm is the historical stream channel for Trimble Creek prior to the creation of the current tailings basins (Figure 1). The thickness of the surficial material under the east berm is indicated as 25 to 50 feet in the depth to bedrock map of the SDEIS Figure (Figure 2) and in the depth to bedrock map MN Geological Survey M-126. Figure 1. USGS Topo map showing the historic stream channel of Trimble Creek. 4

8 Figure 2. SDEIS Figure : Depth to bedrock map. The distribution of bedrock under the FTB has been represented in 2 ways during Polymet MODFLOW modeling. Technical document RS13 of Nov. 16, 2007 Attachment A-6 Fig. 4-2 showed bedrock in the 2007 MODFLOW model as extending under the eastern quarter of the tailings basin. In technical document RS13b of Sept. 8, 2008 Attachment A-6 Fig. 4-7h, bedrock in the 2008 model did not extend under the basin but rather showed the basin to be underlain with surficial material. The text of RS13b, section of Attachment A-6 states: "The location of the bedrock hills that flank the Tailings Basin to the east and south were updated. The location of the bedrock hills is used in the model to define the extent of the low hydraulic conductivity zone that represents the bedrock. Because the footprint of the 5

9 Tailings Basin Mitigation Design is closer to these hills on the southeast side of the footprint than was the footprint for the proposed design, it was important to get the location of these hills as accurate as possible. The location of the bedrock hills was defined using information from the Minnesota Geological Survey s map M-164. The resulting zones of hydraulic conductivity can be seen on Figure 4-7." The extent of the tailings basin footprint represented in RS13b is the same extent as currently proposed in the SDEIS. However, evaluation of flow from the basin using MODFLOW and Goldsim appears to have fallen back to the 2007 representation of the basin footprint and of the underlying bedrock (see GLIFWC comment re: SDEIS modeling and mitigation basin design). Conceptual Model of East Berm: A conceptual diagram of the east berm is provided below. The head difference between the top of the basin (~1720 ft), the head pressures expected in the surficial deposits below the center of the basin (1700 ft; RS13b, 2008), and the head pressure at the toe of the basin (1660 ft) will push water toward the toe of the east berm. The feet of surficial deposits in the bedrock valley under the east berm will conduct water under the east berm and beyond. Figure 3. Conceptual diagram of the east berm of the FTB. 6

10 Revised MODFLOW Modeling of Discharge from East Berm: In order to investigate the approximate magnitude of discharge that would exit the east berm of the FTB, we conducted modified MODFLOW modeling of basin flows in year 20 of the project. To simulate the basin but without the no-flow boundary imposed in previous Polymet modeling, we used the 2008 Polymet MODFLOW model (RS13B Draft-01), with the sole modification being the placement of model drain cells at the east berm. The original 2008 model predicted flows of 3340 gpm from the basins, 570 of which was predicted to flow to the seepage barrier on the south side of the basins (SD026) but no flow to the east because of the no-flow boundary instituted in that model (RS13B Draft-01). Our placement of drain cells in the east berm area of the MODFLOW model enabled water to move east from the berm, rather than reverse flow to the north, west and south as was dictated by the no-flow boundary. The use of drain cells at the east berm to allow eastward movement of water is an identical approach as that implemented by Polymet for the south berm of the tailings basin where the discharge to SD026 is modeled by drain cells. Depending on the exact placement of the drain cells, the modified modeling resulted in an estimate of 588 to 847 gpm of flow through the east berm of the basin. This flow is on a scale similar to the flow predicted for the south berm discharge at SD026 (570 gpm, RS13B Draft-01; or 540 gpm, Polymet 2013j). That the predicted discharges at the south berm and at the east berm are similar is logical because both areas are underlain by bedrock valleys filled with high conductivity surficial deposits. In the context of the predicted total discharge from the FTB at year 20 (3340 gpm, RS13B; or 3230 gpm, Polymet 2013j) the gpm prediction suggests that approximately 1/5 of the FTB water would exit through the east berm. Implication of Faulty Modeling of Discharge to the East: At least three problems arise from the current situation of SDEIS modeling of the FTB with a no-flow boundary on the east and inaccurate representation of bedrock: 1) There is no contaminant transport modeling or evaluation of the water leaving the east side of the basin. Without substantial engineering to remove the water, a lake toward the 1680 foot contour would form (Figure 4) until water spilled toward Spring Mine Lake. The Flotation 7

11 Tailings Management Plan (Polymet 2013m, page16) discusses the need for a drainage swale to release stormwater from the topographically closed area to the east of cell 1E. In the SDEIS or supporting documents, there is no discussion of tailings pond water exiting the basin into this topographically closed area. There is no accounting for contaminants moving eastward, and there is no description of their possible impact on receiving ground or surface waters. Figure 4. Cell 1E discharge area. 2) There are potential receiving surface waters near to the east berm; wetlands at the toe of the east berm, Spring Mine Lake & Spring Mine Creek to the east, and wetlands and an unnamed creek to the north of the proposed drainage swale. 3) The Polymet MODFLOW modeling was designed to prevent any water from leaving the east side of the basin by establishing no-flow boundaries on that side of the model. Because of the noflow boundaries, the model output files (Northmet Model Files DVD, BARR July 2012) show extremely unrealistic groundwater heads in the aquifer surrounding the east side of the FTB. For example, the Polymet MODFLOW 2011 model predicts groundwater head to be over 1800 ft in elevation where the ground elevation is 1660 ft on the east side of the tailings basin. A model with such distorted groundwater head predictions is unlikely to produce accurate flow 8

12 information, rendering the flowpaths to the north, west and south and flow quantities used by Goldsim in the SDEIS unreliable. Realistic flow modeling of the proposed FTB must be conducted to determine flow directions, flow quantities and travel rates for environmental impact prediction. Information on water flow direction and quantity is also needed so that water management plans can be formulated. 9

13 SDEIS MODFLOW Modeling Appears to be of Fatally Flawed and Discarded Tailings Basin Design Modeling in the SDEIS appears to be of a Flotation Tailings Basin (FTB) design that was discarded several years ago and does not model the currently proposed basin design. The 2007 FTB design, that is modeled in Attachment A (2011) of Polymet 2013j, was deemed to be "fatally flawed" by the MNDNR (Mitigation Table, Arkley of 2008/12/09) and was replaced by the "mitigation" design developed in GLIFWC staff have posed a series of questions to the lead agencies regarding the modeling for water quantity and flow direction at the FTB. ERM has provided a series of written responses to those questions. The Response 4 from ERM re: the Plant Site MODFLOW modeling identified Attachment A of the Water Modeling Data package of March 2013 (SDEIS reference Polymet 2013j) as the documentation of the tailings basin flow modeling for the SDEIS. Careful examination of the scant information in the above referenced Attachment A (2011) indicates that the modeling done in 2011 for that attachment was not of the FTB as currently proposed. The footprint modeled for attachment A is the footprint of an early FTB proposal from 2007 (Figure 5) that was supplanted by the FTB design developed during the "Mitigation Options" process of The 2008 mitigation FTB design (Figure 6) is the current design footprint assumed in the text of the SDEIS (SDEIS Fig ). In addition to using a discarded FTB design footprint, the modeling in Attachment A also used a crude representation of bedrock that was supplanted by a more refined bedrock representation during the modeling of the 2008 mitigation design (RS13B Draft-01, 2008). The diagrams and model files supporting Appendix A (2011) further demonstrate that the modeled footprint is of the 2007 fatally flawed FTB design (see footprints in layer 1 of 2007 (Figure 7) and 2011(Figure 8) models, attached), instead of the mitigation basin design (see footprint in layer 1 of 2008 model, (Figure 9)). The rejected basin design had a smaller footprint and did not extend as far to the south and south-east. Unlike the current design, the rejected design did not cover the ash disposal site in the south-east end of the FTB. It appears that the 10

14 SDEIS Goldsim (water quality) modeling is based on MODFLOW (water quantity) modeling of an old FTB design that was deemed fatally flawed and is not modeling the currently proposed FTB design. 11

15 Figure FTB Footprint. 12

16 Figure FTB Footprint. 13

17 Figure 7. Footprints in layer 1 of 2007 MODFLOW model. 14

18 Figure 8. Footprints in layer 1 of 2011 MODFLOW model. 15

19 Figure 9. Footprints in layer 1 of 2008 MODFLOW model. 16

20 Perpetual Water Treatment The proposed Polymet project would require long term treatment of water at both the plant and mine sites. This treatment would be needed for centuries but the lead agencies have not required that the applicant provide an estimate of when treatment would no longer be needed. Therefore, as articulated in Chapter C, GLIFWC staff maintain that water treatment for the proposed Polymet mine is perpetual. GLIFWC staff are gravely concerned that the lead agencies are attempting to minimize the issue of perpetual/long term treatment by using vague and confusing language in the SDEIS. In addition, the language the lead agencies have used has changed during the development of the document even though the model results have not. The SDEIS states on page 5-7: Mechanical water treatment is part of the modeled NorthMet Project Proposed Action for the duration of the simulations (200 years at the Mine Site, and 500 years at the Plant Site). The duration of the simulations was determined based on capturing the highest predicted concentrations of the modeled NorthMet Project Proposed Action. It is uncertain how long the NorthMet Project Proposed Action would require water treatment, but it is expected to be long term; actual treatment requirements would be based on measured, rather than modeled, NorthMet Project water quality performance, as determined through monitoring requirements. (Emphasis added) In response to comments on the PSDEIS (Comment GLIFWC1) the Co-Lead agency disposition states: Modeling predicts that treatment activities will be a minimum 200 years at the Mine Site and a minimum of 500 years at the Plant Site. While long-term, these time frames are not necessarily perpetual. The owning company would be held accountable to maintenance and monitoring required under permit and would not be released until all conditions are met (Appendix C SDEIS) (Emphasis added) 17

21 It is impossible to reconcile these 2 statements. We agree that the duration of simulations were based on capturing the highest predicted concentrations of the modeled action. However, those concentrations require water treatment to avoid violating water quality standards. This treatment is at minimum 200 years at the mine site and 500 years at the plant site. As the lead agencies indicate, these time estimates are only minimums and there is no information that points to a time when water treatment would not be needed. Finally, while the maximum contaminant plume is predicted to occur at the 200 and 500 year mark for the mine and plant sites respectively, this does not mean that contaminants immediately drop to zero. The reduction would be gradual and perhaps last for another few centuries. In addition the SDEIS states on page 5-56: The attenuation effect resulting from sorption is significant enough that arsenic, copper, and nickel are not predicted to travel from source areas to any evaluation locations or the Partridge River within the 200 year model simulation period (Barr 2013f). Analytical calculations suggest that the travel times for these solutes would be in the order of thousands of years." This statement suggests that water treatment activities would be required far beyond the 200 year time frame at the mine site and would be on the order of thousands of years. Therefore, the only logical conclusion is that water treatment is perpetual at this project. It is also important to note that, in the response to GLIFWC comments on the PSDEIS, the lead agencies acknowledge monitoring and maintenance requirements during the same 200 (mine site) and 500 (plant site) year timeframe. The SDEIS requires substantially more transparency on one of the most fundamental issues at stake for this project. The fundamental question is: how long will the company be required to operate and maintain expensive mechanical treatment to meet water quality standards? This singular issue has significant repercussions for the public interest determinations and the scale of required financial assurance. 18

22 Indirect Wetland Impacts The methods used in the analysis of indirect wetland impacts in the SDEIS are essentially the same as the 2009 DEIS. GLIFWC staff reiterate the comments we have provided in the past that the method is overly simplistic, based on a flawed conceptual understanding of hydrology at the mine site and inadequate for the NEPA process of a large scale sulfide mine. The SDEIS has underestimated baseflow at the mine site. The entire conceptual model of perched wetlands with hydrology that is completely decoupled from groundwater was supported by the use of unrealistically low baseflow numbers. Now that the applicant s XP-SWMM model has been discredited and that it is obvious that the movement of groundwater at the mine site is 3 times greater than the SDEIS indicates, the assumption that wetlands will not be impacted by groundwater drawdown should be abandoned. The higher baseflow numbers support the independent analysis of indirect wetland impacts provided by the tribal cooperating agencies in Appendix C. The lead agencies have also based their analysis on the Bog Memo prepared by the Army Corps of Engineers (Eggers, Steve (2011) MEMORANDUM SUBJECT: Distinguishing Between Bogs That Are Entirely Precipitation Driven Versus Those with Some Degree of Mineral Inputs from Groundwater and/or Surface Water Runoff). This memo uses plant community information to determine the degree of hydrologic connectivity between a wetland and groundwater. The conclusions in the memo are appropriate for a system that is not experiencing depressurization of the aquifer (drawdown). However, when mine induced drawdown occurs, new downward pressure gradients are created. Whittington and Price documented that these downward hydrologic gradients can in fact dewater wetlands that are entirely surface water dependent under normal conditions )Whittington, PN and JS Price, The effects of water table draw down (as a surrogate for climate change) on the hydrology of a fen peatland, Canada. HYDROLOGICAL PROCESSES, 20(17), ). The bog memo is not an assessment of the hydrologic conditions of wetlands in a dewatered state but rather an assessment of surface hydrology under normal conditions. The indirect wetland impact analysis should be performed using realistic hydrologic assumptions and appropriate mitigation should be required. 19

23 Figure 10. Summary of issues related to indirect impacts to wetlands. 20

24 Seepage Capture Efficiency As detailed in comments submitted to the lead agencies for the 2009 DEIS and for the current SDEIS, water quality analyses for the Partridge and Embarrass Rivers are inadequate. The results, be they deterministic (DEIS) or in the form of probability distributions (SDEIS) are based on a flawed understanding of hydrology at both mine site and plant site. This flawed understanding, reflected most prominently in the errors in baseflow calculations, is carried forward to the MODFLOW hydrologic modeling. At the mine site MODFLOW under-predicts the amount of water that would flow into the mine pits and thus under-predicts the amount of water treatment needed for both short and long term closure. At the plant site, the MODFLOW model is constructed in a way that is not representative of reality and therefore yields results that are not logical. The lead agencies appear to disregard these problems because there is faith that the seepage capture and treatment systems will work at over 90% effectiveness for centuries. The SDEIS claims of long term compliance with applicable water quality standards depend entirely on this leap of faith. On conference calls scheduled to discuss these issues, the lead agency consultants have stated that the effectiveness of the capture systems have not been questioned and the lead agencies have not been able to provide any references that would support their position. We suggest that there are substantial reasons for skepticism regarding capture efficiency for the flotation tailings basin, hydrometallurgical tailings basin, and category 1 stockpile seepage capture systems. This skepticism is based on available literature and the performance of other facilities in the immediate vicinity. The EPA conducted an analysis of the effectiveness of seepage capture systems (Evaluation of Subsurface Engineered Barriers at Waster Sites, United States Environmental Protection Agency (EPA), 1998). This analysis looked at capture systems at 36 facilities and evaluated their effectiveness based on the performance requirements at each site. It is difficult to extrapolate the results of this analysis to the Polymet setting because a) the required effectiveness varied from facility to facility; b) the way in which effectiveness was measured was different (i.e. water quality improvements downstream versus change in hydrologic head pressure) and c) data collection varied between facilities. Despite these difficulties, the report indicates that 10% of the reviewed containment systems failed to meet the desired performance objectives and required 21

25 corrective action. An additional 19% of the evaluated facilities did not have sufficient data to conclude whether the containment system was operating successfully or not. Furthermore, there is no information on the effectiveness of any of these facilities at timeframes remotely comparable to the needs at Polymet. In the EPA report, long term is considered 30 years whereas the water capture needs at Polymet are perpetual for the flotation tailings basin, category 1 stockpile and hydrometallurgical tailings basin. Finally, none of the facilities in the study are as large as the one proposed at Polymet. At the tailings basin, Polymet has proposed to install a seepage collection system around the north and west sides of the facility. The scale of this engineering control is extensive. It would be approximately 5 miles long and would have to be keyed to bedrock that is 25 to 50 feet below ground surface. The most likely pathway for leakage at this barrier will be in the vicinity of the key with bedrock (EPA 1998). This feature, and the similar containment system at the Category 1 waste rock stockpile are assumed to capture 93% of water leaving the facilities for an indeterminate period of time. As previously stated, there is no scientific justification for this number. The only examples we are able to identify at this time suggest capture rates that are lower. 22

26 Figure 11. Summary of issues surrounding the proposed seepage capture systems. In the Iron Range, GLIFWC staff are aware of 2 examples that are directly analogous to the proposed Polymet containment system. These are the seepage collection system at SD026 on the LTV basin itself, and the seepage collection system at the MINTAC tailings basin. SD026 NorthMet water management plan version 2 states that the south side seepage capture facility is already operational. The SDEIS further states that the system is operating effectively and capturing all seepage out of the south end of the facility. This statement is factually incorrect. MPCA indicates that the seepage capture system at SD026 it is not working properly and additional work must be performed if it is to achieve the desired water quality improvements 23

27 in Second Creek (MPCA Personal Communication). There are two immediate comments regarding SD026. First the SDEIS text must be corrected to accurately describe the lack of effectiveness of the seepage capture system and second, a quantitative assessment of the cumulative water quality effects of this wastewater seepage to Second Creek and the Partridge River should be performed. In addition, the NorthMet water management plan v2 states that the seepage capture system would be redesigned if necessary. Given that it is necessary, the redesign of the system should be included in the EIS document. MINNTAC The MINNTAC tailings basin is of similar age and design as the LTV tailings basin that Polymet proposes to use. Both are large, unlined facilities that are designed to allow water seepage to surface and groundwater in order to maintain structural stability. Both facilities have been discharging thousands of gallons per minute of high sulfate wastewater into the environment for decades. MINNTAC, as part of a schedule of compliance, has begun constructing a seepage capture system that is intended to bring the facility into compliance with applicable water quality standards. The capture system is similar to the one proposed by Polymet in that it consists of a trench to capture seepage and a system that would pump tailings water back into the facility. The MINNTAC system was originally intended to extend to bedrock but that extension was not possible in some locations because of the presence of large boulders that made construction difficult. Because the geology of the surficial deposits is similar at the LTV facility, it is likely that similar difficulties will be encountered by Polymet that would decrease capture efficiency. It is important to note that seepage capture of greater than 95% is needed at MINNTAC in order to achieve compliance with applicable water quality standards (Subsurface Evaluation and Seepage Evaluation Report, MINNTAC Tailings Basin, Mountain Iron Minnesota, US Steel Corp., 2008). However, this high capture efficiency was not considered feasible and MINNTAC predicted that their capture efficiencies would not exceed 60% (Subsurface Evaluation and Seepage Evaluation Report, MINNTAC Tailings Basin, Mountain Iron Minnesota, US Steel Corp., 2008). Actual performance of the capture system is below 50%. Ultimately, the main purpose of the system is to comply with water quality standards. The capture system will not be able to achieve that goal. 24

28 Because MINNTAC is the only facility that is analogous to the LTV basin, there are serious doubts about the predicted 90% or greater capture efficiency used in the Polymet SDEIS. Seepage in bedrock is incorrectly characterized. The lead agencies have maintained that little to no water flows through the bedrock at the site but have not provided sufficient justification for this assumption. In fact, the SDEIS assumes that the bedrock is a no flow boundary and therefore assumes that no water moves through bedrock at all. Mapping of known faulting in the area indicates that there is a strong possibility for water to move quickly through faults and fractures (Figure 12). Evidence for fault and fracture flow is also found in the water quality sampling done at the mine site. Water samples in two deep boreholes at the mine site found Tritium and un-ionized ammonia. The presence of these constituents indicates a hydrologic connection with surface water. Tritium indicates water found in the deep boreholes was surface water post 1950, because it is only after nuclear testing that this constituent entered surface waters. Un-ionized ammonia is produced by blasting activities at taconite facilities. The Northshore pits, which are the closest sources for this constituent, are located one mile northeast of the sample boreholes, and are connected to the Polymet mine site through bedrock fractures. Review of the Northshore pit discharge monitoring data for SD001, in 2006 and 2008, shows the average concentration of un-ionized ammonia exceeded the 0.04 mg/l NPDES permit limit. This indicates that groundwater travel time through bedrock faults and fractures will be orders of magnitude faster than project modeling for Polymet suggests. There is no reason to expect that fractures and faults do not occur at the plant site. Therefore, tailings water will escape through bedrock in quantities and speeds that exceed those described in the SDEIS. Finally, faults and fractures could exacerbate the problem of water bypassing the seepage containment system at the top of the bedrock. Summary for Seepage Capture Comments The prediction of water quality standard compliance for this proposed project hinges on the perfect operation of the water capture systems. The reliance on this engineered containment system that uses overly optimistic capture rates and must function in perpetuity is not scientifically supported and therefore is not appropriate for the SDEIS. 25

29 The water quality and quantity impacts at both plant site and mine site should be remodeled by using a range of capture efficiencies. We suggest 60%, 70%, 80% capture rates be modeled for the tailings basin and category 1 stockpile. Water quality values for each of these capture rates should be reported. This will allow the public and decision makes to have a realistic picture of the risk and uncertainty for this project. Seepage capture at the flotation tailings basin does not account for seepage out of the east side of the basin. The seepage capture system should be expanded to account for this expected discharge. A MODFLOW model was developed to assess the amount of seepage that would flow out of the basin. As detailed in GLIFWC comments, that model is designed in a way that does not conform to reality and therefore the results are unreliable. 26

30 Figure 12. Known Faults and Fractures in the area of the Polymet Project. (EMorey, G.B., and Meints, Joyce, compilers, 2000, Geologic Map of Minnesota, bedrock geology (3rd edition) : Minnesota Geological Survey State Map Series S-20.) 27

31 Ability of Goldsim to Accurately Predict Contaminant Concentrations: We remain concerned about the inability of Goldsim to accurately predict current and future contaminant concentrations. This is particularly troubling in the lower Partridge River (e.g. SW005) and in Colby Lake where Goldsim predictions of current conditions appear to be inaccurate. In recent conversations with the lead agencies and ERM, there has been agreement that the modeling in the SDEIS does not accurately capture the environmental conditions at Colby Lake. Additional modeling of this waterbody is needed to assess impacts of the proposed project and to evaluate the suitability of Colby Lake water for use in augmenting the flow of other waterbodies. In addition, the discrepancies between modeled and observed data at SW005 should be addressed in detail. Mercury The SDEIS does not adequately address mercury concerns as detailed in Appendix C. The issue of bioaccumulation of methyl mercury in fish, especially in a sulfate rich environment remains unaddressed for both project specific impacts and cumulative impacts. Wild Rice Standard The concerns over the MPCA s interpretations and recommendations regarding the wild rice sulfate standard have not been resolved. The information provided in Appendix C is still applicable to the SDEIS. In addition, staff believe that water quality modeling underestimates the amount of sulfate at points of compliance. Even with this problem, contaminant modeling suggests that the sulfate standard will be violated in the Partridge River points of compliance approximately 10% of the time. While this may meet the lead agencies arbitrary evaluation criteria (standard met 90% of the time) it certainly is not enough to warrant the issuance of an NPDES permit. At the Embarrass River the standard is already exceeded at the point of compliance because of historic contamination from the tailings basin and the area 5 pits. It is not clear if the capture system around the tailings basin will function well enough to allow the standard to be met. 28

32 Alternatives Staff continue to believe that the underground mine and west pit backfill alternatives have not been properly explored given the environmental benefits they could bring to the project. Our comments stand as detailed in Appendix C. In addition, there are a number of alternatives that the SDEIS fails to explore. These include paste backfill, immediate operation of the RO treatment facility at the mine site, etc. Additional details are found in the comments submitted by the Fond du Lac Band. No Action Alternative During the review of the PSDEIS GLIFWC staff commented that continuation of existing conditions was not an appropriate No Action Alternative (Table 8-1, Item 10, Chapter 8). The lead agencies responded by defending their work in the PSDEIS and disagreeing with our position. However, in the SDEIS the lead agencies completely eliminated any analysis for the No Action alternative. SDEIS Section , page 5-78 of the SDEIS was rewritten to point out that: "It is important to note, however, that this modeled Continuation of Existing Conditions Scenario is not the same as the No Action Alternative, which is described in Section " Unfortunately the SDEIS has no serious analysis of a No Action Alternative. Section is less than 1 page long and gives a very general and hypothetical discussion. It in no way represents a serious analysis of a No Action Alternative. The SDEIS needs to have modeling of a No Action Alternative, as we describe in SDEIS Appendix C, Hydrology Section, topic 3 so that the impacts of the proposed action can be compared to a scenario where the project does not happen. Cumulative Effects The concerns regarding the cumulative effects analysis have not been resolved. The information provided in Appendix C is still applicable to the SDEIS. 29

33 Impacts from Rail Car Spillage The concerns regarding the hydrologic impacts of sulfide ore dust spillage along the rail corridor have not been resolved. The information provided in Appendix C is still applicable to the SDEIS. Loss of High Biodiversity Significance Values Sites The concerns regarding the loss of high biodiversity sites such as the 100 mile swamp, Lynx and Moose habitat and remaining wildlife corridors have not been resolved. The information provided in Appendix C is still applicable to the SDEIS. 30

34 Financial Assurance The Supplemental Draft Environmental Impact Statement (SDEIS) NorthMet Mining Project and Land Exchange failed to adequately address closure and maintenance costs and length of time for post-closure treatment in the context of financial assurance requirements. The failure of the Army Corps of Engineers and Forest Service to adequately address these areas in the SDEIS, and instead propose they be addressed at a later time when the Minnesota Department of Natural Resources undertakes the review of mining permits, is an ill-conceived attempt to either abdicate their federal trust responsibility or delegate it to the state of Minnesota. The Fond du Lac Band of Lake Superior Chippewa Indians is a member of the Great Lakes Indian Fish and Wildlife Commission. The Fond du Lac Band retains off-reservation rights to hunt, fish and gather under the 1854 Treaty including lands and waters that are adjacent to the proposed NorthMet mine site. All federal agencies, including the Army Corps of Engineers and Forest Service, have a federal trust responsibility to protect the habitats that sustain harvests by treaty signatory tribes when completing Environmental Impact Statements. The Army Corps of Engineers (ACOE) and Forest Service failed to adequately address the mine closure and maintenance costs, length of time for post-closure treatment, and financial assurance requirements in the SDEIS. The ACOE and Forest Service s position in the SDEIS is that these items can addressed at a later time by the Minnesota Department of Natural Resources in the review of future mining permits. This action is an ill-conceived attempt to abdicate their federal trust responsibility to protect the habitats that support treaty harvests. Despite their attempts, the ACOE and Forest Service cannot delegate their federal trust responsibility to protect habitats that sustain treaty harvests to state of Minnesota when it undertakes the process of permitting the mine. The SDEIS fails to adequately address the costs for closure and long-term treatment in the context of financial assurance requirements. The superficial estimate of financial assurance provides inadequate detail as to how any of the cost estimates were developed. The DEIS provided a discussion about the options for 31

35 financial assurance instruments however any substantial discussion of costs and assumptions on the metrics were not provided and instead postponed until the permitting phase of this Project. This approach fundamentally contradicts federal environmental policy and must be revised, with significant additional study, to appropriately evaluate closure, mitigation, reclamation, and perpetual treatment cost estimates prior to being published in the final EIS. GLIFWC has identified specific items that need to be addressed in the Final Environmental Impact Statement on the following pages. Executive Summary The Executive Summary fails to provide: 1) an estimated cost for reclamation, 2) an estimated cost for post closure maintenance and water treatment, 3) any realistic estimate as to the length of time that post closure maintenance and water treatment would be required, or 4) information as to how financial assurance instruments would be structured to ensure the costs of post closure maintenance and water treatment are paid for an uncertain amount of time and for which models indicate would be longer than 200 years at the mine site and 500 years at the plant site. Within the 54 pages of Executive Summary only a single paragraph addresses the issue of financial assurance as noted below: State law requires that PolyMet provide financial assurance before a Permit to Mine can be granted. Financial assurance instruments, such as bonds or trust funds managed by the state, would pay the estimated cost of reclamation, should the mine be required to close for any reason at any time or the company is not able to complete its obligations under the Permit to Mine 1. The SDEIS Executive Summary failed to provide either an estimated cost of reclamation or an estimated cost for post closure maintenance and water treatment. Since these costs form the 1 Supplemental Draft Environmental Impact Statement (SDEIS) Executive Summary NorthMet Mining Project and Land Exchange, page ES-54 32

36 basis for financial assurance requirements and identify key environmental costs of the project their absence is problematic and a serious omission. GLIFWC staff have repeatedly requested that the Co-Lead Agencies address the length of time that post closure maintenance and water treatment would be required 2, however edits prepared by the Co-Lead Agencies for the SDEIS failed to identify a defined time period and noted only that modelling simulations resulted in (200 years at the Mine Site and 500 years at the Plant Site) 3 and it is uncertain how long the NorthMet Project Proposed Action would require water treatment, but it is expected to be long term. The Executive Summary also failed to explain how financial assurance instruments can be established to cover the cost of reclamation and post closure maintenance and water treatment costs if it is uncertain how long the NorthMet Project Proposed Action would require water treatment 4. The Executive summary also failed to communicate water treatment would be longer than 200 years at the Mine Site and 500 years at the Plant Site Cost Coverage and Estimation The SDEIS provides a listing of items for which costs must be included in the financial assurance instrument (i.e. demolition of all structures and remediation of sites [fencing the perimeters, sloping and seeding the overburden, constructing outlet structures, removing culverts, etc]) yet fails to provide any estimated costs or the basis for these costs. This section also notes that Reclamation and post-reclamation costs are required yet fails to provide any estimated costs or the basis for their estimation (i.e. quantities, unit costs, inflation estimates). The SDEIS notes, PolyMet would ensure that the financial assurance amount is established as a function of at least three main variables: 1) extent of surface disturbance and potential releases from waste storage facilities, 2) reclamation and long-term care standards (including mechanical water treatment), and 3) reasonable assessment of the costs to execute the 2 Supplemental Draft Environmental Impact Statement (SDEIS) NorthMet Mining Project and Land Exchange, Table NorthMet Mining Project and Land Exchange PSDEIS (ver.2) Tribal Comments and Co Lead Agencies' Dispositions 8/19/ Supplemental Draft Environmental Impact Statement (SDEIS) Executive Summary NorthMet Mining Project and Land Exchange, page Supplemental Draft Environmental Impact Statement (SDEIS) Executive Summary NorthMet Mining Project and Land Exchange, page

37 Contingency Reclamation Plan. The SDEIS provides no discussion as to how these variables are likely to impact overall costs of the financial assurance instrument and how large the variance of cost estimates are likely to be. The SDEIS notes, In addition to the cost of physical closure and reclamation activities as shown in Table , annual post-closure monitoring and maintenance is estimated to be in the range of $3.5m - $6m per year. The cost estimates would be finalized by the MDNR during the permitting processes. Table Preliminary Cost Estimate for Closure Year of Closure (end of year) Annual Postclosure Monitoring and Maintenance Year 1 Year 11 Year 20 Estimated Range $50m - $90m $160m - $200m $120m - $170m $3.5m - $6m Source: Foth The costs provided in Table provide no basis for their estimation or other assumptions. The SDIES failed to provide detailed costs for the physical closure and reclamation of the mine site that will need to be covered by Financial Assurance Instruments a detailed discussion as to how much money will be needed from financial assurance instruments and when. The basis for physical closure and reclamation costs need to be based on the private sector costs and include realistic profit margins when performing cleanup tasks. Cost to be covered by Financial Assurance need to include detailed information and cover the following areas: 1) interim operations and maintenance for agencies when a company declares bankruptcy and leaves the site, 2) water management and treatment, 3) removal of hazardous wastes and substances, 4) demolition, removal and disposal of facilities and equipment, 5) earthwork (sloping, backfill, grading), 6) revegetation, 7) long-term operations and maintenance, 8) Monitoring costs, 9) detailed inflation estimates, 9) provide a cash flow analysis, and 10) detail assumptions in the determination of risk and uncertainty. The final EIS needs to include the lifecycle of the pollution control structures built, estimates for their original construction costs, and projections for replacement costs for timeframes exceeding 34

38 200 years at the Mine Site and 500 years at the Plant Site. In addition to providing detailed cost estimation, the final EIS needs to clearly identify and communicate assumptions regarding inflation rates, rates of return, contingencies, and labor rates. Closure and maintenance costs will need to be covered years into the future, so a net present value must be included in the final EIS Financial Assurance Instruments The SDEIS provides a listing of contingencies that may have to be covered by financial instruments including: 1) physical difficulties in implementing reclamation plans, 2) escalating standards of closure, reclamation, and long-term monitoring, 3) unanticipated liabilities, 4) unplanned cessation of mining, 5) failure of the mining company, and 6) failure or limitations on the ability of third parties to pay reclamation costs. Unfortunately the SDEIS provides no discussion as to any of the costs of the contingencies that are identified. The SDEIS also fails to discuss how financial instruments would be structured to meet those contingencies or the assumptions made by PolyMet to ensure an adequate stream of revenue is available to meet closure and maintenance costs What fundamental economic assumptions are being made when PolyMet proposes to use surety bonds, irrevocable letters of credit, cash and cash equivalents, trust funds, insurance policies, or a combination of these Financial Assurance Instruments? The SDEIS failed to clearly state how the State of Minnesota will determine the maximum bond requirements, how it estimated direct reclamation costs, how it determined its estimates for inflation (i.e. periodic bond recalculation or calculate an Inflation factor using a common index, such as the Construction Cost Indexes (CCI) from the Engineering News Record), and how it will determine indirect reclamation costs and how it will calculate the total bond amount. The Final EIS needs to provide information contained in the Reclamation Bond Summary Sheet that is attached Cessation of Financial Assurance The SDEIS notes, PolyMet may cancel financial assurance only upon approval by the MDNR after it is replaced by an alternative mechanism or after being released (in whole or in 35

39 part) from financial assurance. The SDEIS fails to discuss any federal oversight of this process and how the federal government will meet its trust responsibility in protecting habitats that support off-reservation treaty harvests Legacy Contamination The SDEIS discusses Cliffs Erie site, identifies 62 Areas of Concern (AOC s), and discusses PolyMets role in site remediation. The SDEIS failed to provide any information as to cost estimates for addressing the legal requirements for mitigating the AOC s as identified. This information is needed to ascertain if the proposed project would further contaminant AOC s and increase clean-up/remediation costs. 36

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49 Date: March 8, 2013 Attachment B Version: 12 Page 114 NorthMet Project Water Modeling Data Package Volume 1 - Mine Site [ ( )] Equation 5-22 For example, if the aquifer length is 1000 meters, then the desired dispersion length from Equation 5-22 is 11.8 meters. Then, because the dispersion length is equal to one-half the cell length, the cell lengths should be approximately 23.6 meters. Given the aquifer length and the optimal cell length, the aquifer will be represented using 42 cells to obtain the desired degree of dispersion. For the DEIS modeling, a MODFLOW model of the Mine Site was used to calculate groundwater inflow rates to the pits during operations and the expected head distribution and groundwater flow directions during reclamation and long-term closure (Reference (32)). The groundwater flow rates to the pits were used to develop the water balances for the pits, which directly affect the water quality within the pits. The distribution of heads in closure was used to establish the groundwater flow paths that were used in the MT3D models to evaluate dissolved solute transport and potential groundwater impacts associated with the Project (Reference (11)). For current modeling, a similar approach is used; however, several modifications were made to the previous MODFLOW model to incorporate new information. A brief discussion of the changes to the model is included here, with additional details regarding model setup presented in Attachment C. The DEIS MODFLOW model was calibrated to a baseflow estimate of 1.43 cfs at monitoring station SW004. Revisions to the XP-SWMM model since the DEIS modeling (Section ) resulted in different baseflow estimates for the Partridge River. The MODFLOW model was re-calibrated using target baseflow values of 0.41, 0.51, and 0.92 cfs at SW002, SW003, and SW004, respectively. In addition, groundwater elevations measured at Mine Site monitoring wells MW-1 through MW-18 were included as targets in the updated calibration. The automated-inverse modeling code PEST (Reference (67) and Reference (68)) was used to complete the model calibration. Details of the model calibration are presented in Attachment C. The revised model calibration resulted in different optimized values for the horizontal hydraulic conductivity of the surficial aquifer and bedrock, which are used to establish the distribution of values used for the probabilistic groundwater flow path modeling (Section ). To calculate groundwater inflow rates to the pits during operations, MODFLOW simulations were developed using methods similar to those used for the DEIS modeling (Reference (32)). The footprints and vertical extent of the mine features was modified from the DEIS model to reflect the current Mine Plan. Details regarding the simulation setup and results are included in Attachment C. The estimates of groundwater inflow rates to the pits were used for the overall water balance of the pits in the probabilistic model (Section ).

50 GREAT LAKES INDIAN FISH AND WILDLIFE COMMISSION P. O. Box 9! Odanah, WI 54861! 715/ ! FAX 715/ ! MEMBER TRIBES! MICHIGAN WISCONSIN MINNESOTA Bay Mills Community Bad River Band Red Cliff Band Fond du Lac Band Keweenaw Bay Community Lac Courte Oreilles Band St. Croix Chippewa Mille Lacs Band Lac Vieux Desert Band Lac du Flambeau Band Sokaogon Chippewa Via Electronic Mail / Original by Mail March 2, 2012 Memorandum Attachment C To: From: Re: Thomas Hingsberger USACE Erik Carlson Minnesota DNR John Coleman, Environmental Section Leader Polymet model calibration to Partridge River low flows The hydrologic models for the Polymet mine site have been calibrated to targets that under-represent true baseflow. Models should be calibrated to a strong set of observational data. Construction of the site s basic hydrologic model to unrealistically low baseflows has ramifications for all the flow and contaminant modeling at the site. Under-representation of Partridge River baseflow. Review of the winter baseflow measurements and comparison to predictions made by XP-SWMM indicate that XP-SWMM substantially underpredicts baseflow (Barr June 9, 2011, Comparison of MDNR winter flow gauging to Partridge River XP-SWMM model). This has ramifications throughout the parameter sets being used in models characterizing hydrology at the Polymet mine site. In the above referenced memo, Barr points out that the average measured baseflow at Dunka Rd. was 5.0 cfs while the XP-SWMM predicted baseflow is 0.4 cfs. Even when discharge from Northshore Mining was taken into account, the average baseflow measured at Dunka is 4.3 cfs while XP-SWMM predicts 0.42 cfs. In its memo, Barr correctly points out that: "At all locations along the main stem of the Partridge River, the XP-SWMM-estimated baseflow is less than the MDNR-measured baseflow. The XP-SWMM model provides a conservative estimate of Partridge River baseflow for the purposes of modeling water quality impacts (e.g., less dilution of loads from the Mine Site)." What is not acknowledged in the Barr memo is that calibration of hydrologic models to an underestimate of baseflow produces models that characterize the groundwater hydrologic system as moving an unrealistically small quantity of water. 550 Babcock Dr., Rm. B102 Madison, WI Fax Baseflow_calibration_v wpd