Cross-posted with permission from Indian Country Today.
Chilean mining magnate Andrónico Luksic saw an opportunity in purchasing a $5.5 million townhouse in Kalorama, a posh section of Washington D.C., immediately after President Donald Trump’s election, according to The Wall Street Journal.
The exact details of that opportunity remain murky.
His representatives and the Ivanka Trump/Jared Kushner camp insist it is purely coincidental that Ivanka, daughter and assistant to President Trump, and her husband Jared Kushner, senior advisor to President Trump, are Luksic’s first tenants.
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Luksic, whose family owns Antofagasta PLC and Twin Metals Minnesota, is embroiled in a lawsuit with the federal government over development of what would be one of the world’s largest copper, nickel and platinum mines in the pristine Boundary Waters Canoe Area (BWCA) in Northern Minnesota. The lawsuit seeks to protect the company’s mineral rights and invalidate a September 2016 opinion by U.S. Department of the Interior Solicitor Hilary Tompkins allowing the Bureau of Land Management discretion in denying Twin Metals’ leases.
The proposed Twin Metals mine lies within 1854 Treaty lands of the Fond du Lac, Bois Forte and Grand Portage bands of Minnesota Ojibwe. Tribes and environmental allies have been opposing toxic sulfide mining in the region for years, claiming that pollution from such mines contaminates fish and wild rice with mercury. The PolyMet mine, located in the Lake Superior watershed, 20 miles from the proposed Twin Metals mine, has met with considerable pushback from tribes and citizen groups. Much further along in the permitting process than the Twin Metals project, PolyMet also mines copper and nickel. The Twin Metals mine would be located in the BWCA shed, immediately adjacent to the Lake Superior watershed. Opponents fear that Twin Metals would likely try to use PolyMet’s excess waste capacity, thus adding to pollution in both watersheds.
According to Twin Metals representatives, the in-ground value of minerals there is more than $40 billion; the company has so far invested more than $400 million in acquisition, exploration, technical, environmental and other project development activities. According to a Twin Metals press release, the company has done so “relying on the federal government’s repeated affirmation of the validity of the mineral leases.”
What does this have to do with Luksic’s townhouse rental to the Trump/Kushner family? According to The Hill, Trump and Kushner remain blissfully unaware that some might find the rental arrangement unseemly.
In her April 5 interview with Gayle King on CBS This Morning, Ivanka Trump responded to criticism that her lack of pushback on her father’s presidential actions and policies amount to complicity.
“I don’t know what it is to be complicit. If it means wanting to be a force for good and to make a positive impact, then I’m complicit,” she said. “I will hold myself to the highest ethical standard.”
The couple are reportedly paying $15,500 monthly rent for the townhouse, a deal that a D.C. realtor calls a terrible investment for Luksic, since the tenants will get use of a $5.5 million home for far less than it normally costs to keep a home of similar value. Luksic’s business manager, however, told The Hill that the rent represents a reasonable return on the magnate’s initial investment.
Ethics lawyer Rob Walker told The Wall Street Journal that the Trump-Kushner townhouse rental might create a political appearance problem. Entering into a business relationship with someone who has important issues before the administration may be improper.
“To me, the favor is having a house made available on short notice,” said Trevor Potter, a lawyer who chaired the Federal Election Commission.
Apparently, the house was never publicly listed for rent.
A spokesperson for Antofagasta said the two issues are completely unconnected. As a mining company listed on the London Stock Exchange, it “complies with the principals and provisions of the UK Corporate Governance Code,” a spokesperson said in an e-mailed statement to ICMN. The Luksic family own 65 percent of shares and have two family members on the board, the company said—Luksic, a “non-executive director,” and Chairman Jean-Paul Luksic.
“Antofagasta PLC has always taken corporate governance very seriously and has in place strict policies and procedures around managing and reporting any Directors’ potential conflicts of interest,” Antofagasta said.
“Regarding Andrónico Luksic’s personal investments, he’s made numerous real estate investments in the U.S. in recent years,” the company added. “The fact that one of these properties is rented to Ms. Trump and Mr. Kushner is coincidental. These renters pay a fair market value for their rental. There is no relationship whatsoever between this rental and the TMM lawsuit, nor has Mr. Luksic met his tenants.”
Nevertheless, Luksic’s townhouse investment may very well turn out lucrative for his company.
Nancy Schuldt, Water Projects Coordinator for the Fond du Lac tribe in Minnesota, was unable to comment on the connection between Luksic’s Twin Metals project and the sweet rental deal with Trump and Kushner. She did, however, note that the amount of political pressure surrounding mining development in Minnesota has been intense and very real.
“Our elected congressional representatives here in Minnesota are applying a lot of political pressure to forward the PolyMet mine, “ she said.
For instance, the Associated Press reported that U.S. Rep. Rick Nolan, D-Minn., applauded the U.S. Forest Service’s January 2017 decision to extend access to federal lands for the PolyMet mine project.
“This is wonderful news for our Iron Range,” Nolan said in a statement. “We are another step closer to making the PolyMet initiative a reality. I will continue to work with the appropriate agencies to ensure that the proposed project moves forward in an efficient manner.”
The Forest Service had only recently, under the Obama administration, scuttled the nearby Twin Metals mine, considering it too close to the BWCA. That decision could be overturned by the Trump administration.
Minnpost.com noted a correlation between Trump’s election and a sweeping legislative assault on Minnesota environmental traditions. In an April 6 story the news website described a major undoing of buffer rules protecting lakes and streams, and an increase of limitations on citizen rights to challenge mining permits, all cleverly hidden in legislative omnibus bills that package budget and policy matters together.
According to Schuldt, copper and nickel mining would destroy or degrade the tribe’s treaty resources. She speculated that it is entirely possible that PolyMet might sell its permit to a larger, wealthier mining company.
Indeed, the promise of job creation for the region may prove to be impossible to fulfill due to dropping world rates for copper as well as PolyMet’s convoluted business model, according to the Star Tribune.
Additionally, the Forest Service may have incurred the rancor of taxpayers by selling land to PolyMet at far below market value, according to Minnpost.com.
But PolyMet spokesman Bruce Richardson said such claims are unfounded and that the Forest Service, a division of the U.S. Department of Agriculture, had evaluated the property accurately.
“We have confidence in the Forest Service appraisals, which followed well-established federal guidelines by the Department of Justice,” Richardson said in a statement to the Duluth News Tribune. “After years of review and analysis, the Forest Service has determined the land exchange is in the best public interest.”
Schuldt and others remain unconvinced.
“There are a many questionable financial parameters associated with the PolyMet project that give me no confidence that it can be built and operated and reclaimed without severe and permanent damage to the environment,” Schuldt said. “That is quite clear that the regulation of the mining industry is almost nonexistent when it comes to water quality.”