UPDATE 1-Minnesota court orders fresh review of PolyMet mine permits

(Adds details from ruling, reaction from company and environmental groups)

By Ernest Scheyder

April 28 (Reuters) – The Minnesota Supreme Court on Wednesday ordered state regulators to reconsider some permits needed by PolyMet Mining Corp to build an open-pit copper mine in the state's rural north, handing a win to environmentalists and delaying the project.

The ruling from the state's top court comes as the United States tries to produce more metals used in the manufacture of electric vehicles, which use twice as much copper as those with internal combustion engines.

Those efforts have had mixed results, with proposed mines for lithium, copper and other EV metals under increasing scrutiny across the country.

The Minnesota court ordered the state's Department of Natural Resources to hold contested case hearings, which are akin to trials, for two permits needed for the $1 billion project, located in the state's Iron Range, about 200 miles (322 km) north of Minneapolis.

The court said regulators must reexamine the effectiveness of PolyMet's plans to line the mine's tailings dam waste rock storage facility with bentonite clay to prevent toxins from leaking.

The court also ordered regulators to set a fixed term for PolyMet's permit to mine, which had been granted initially without an end date. Justices narrowly tailored their ruling, rejecting a request to force new hearings for other mine permits.

PolyMet Chief Executive Jon Cherry said the ruling was a "big win" for the company. "We continue to review the decision and will have more to say about our path forward in due course," he added.

Shares of St. Paul, Minnesota-based PolyMet fell about 1.4% to $3.66 after the ruling. Mining giant Glencore Plc is the company's largest shareholder.

The Minnesota Center for Environmental Advocacy, one of the groups that brought the lawsuit, also praised the decision and said the state's Democratic governor, Tim Walz, should now "make better decisions and protect Minnesotans and the water they depend on." (Reporting by Ernest Scheyder; Editing by Leslie Adler)

By Matt Earle

Matthew Earle is the Founder of MiningFeeds. In 2005, Matt founded MiningNerds.com to provide data and information to the mining investment community. This site was merged with Highgrade Review to form MiningFeeds. Matt has a B.Sc. degree with a minor in geology from the University of Toronto.

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