Thursday, April 16, 2015

Mining's big price tag is down the road for the public to absorb

Don’t burden Minnesota taxpayers with PolyMet cleanup costs

By John Gappa | 04/15/15

John Gappa serves as the chief financial officer for a Minnesota-based company and has 30 years of experience as a financial executive. In 2011, Gappa was named CFO of the year by the Minneapolis / St. Paul Business Journal.

Too frequently, the debate about PolyMet’s proposal to build a copper-nickel, or sulfide mine, in northern Minnesota is portrayed as a debate between conservationists and business, between jobs and the environment. On tax day, April 15, I want to bring a different perspective from my 20 years of experience as a chief financial officer. If Minnesotans are not careful, we could end up footing a future tax bill enlarged by publicly funded cleanup costs.

As a CFO, I have reviewed hundreds of millions of dollars of investments creating over 1,000 jobs. My role in these investments was to develop the business case, project costs and revenues over a 20-year period, and evaluate the returns and associated risks.

While most of these investments were successful, some were not. Over the years, I learned the hard way that failed projects all have two problems: overestimated benefits and underestimated costs and risks.

(Continued here.)

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