WASHINGTON— Members of a U.S. Senate-House conference committee have eliminated a provision that would have cleared the way for completion of a land exchange between PolyMet Mining and the U.S. Forest Service.

Eighth District Congressman Rick Nolan and Sen. Tina Smith, both Minnesota Democrats, had successfully added the provision as a rider to the National Defense Authorization Act (NDAA) earlier this year. The measure was among a laundry list of provisions designed to supersede longstanding federal land management and environmental policy, including weakening of the Endangered Species Act and shortening environmental review for new mining projects.

“Democrats successfully prevented the inclusion of numerous toxic environmental riders in the conference report,” stated Congressman Adam Smith, of Washington state, who posted a summary of the report online.

Sen. Tina Smith expressed disappointment at the decision by conferees to remove the PolyMet rider. “This amendment would have finalized a land exchange authorized by the Obama Administration allowing them rights to the land above minerals they’ve owned for nearly three decades,” she said. Smith was joined by Sen. Amy Klobuchar, who had backed the measure and also expressed her disappointment.  “This project will help the region move forward while ensuring that the project continues to be held to the high standards of the review process,” said Klobuchar.

The measure to authorize the federal land exchange for PolyMet would have wiped away ongoing legal challenges to the land swap, which represent the last hurdle to the exchange. While the exchange has already been completed, parties in the ongoing litigation have agreed that the exchange could still be unwound were opponents to prevail in court.

Several environmental groups are suing the federal government for approving the land exchange, arguing that the federal government undervalued the roughly 6,600 acres of the Superior National Forest that PolyMet has sought to obtain for the mine. Paula Maccabee, attorney for Water Legacy, one of the plaintiffs in the case, called the exchange “a sweetheart deal.”

Maccabee said she was cautiously hopeful following the defeat of the measure. “Due process survives for now in Minnesota,” she said, while noting that with Congress still in session, the measure could still be resurrected. “We haven’t declared victory. We have to continue to be vigilant,” she said.

Kathryn Hoffman, CEO of the Minnesota Center for Environmental Advocacy, said it’s time for Congress to let the courts do their job. “Sixteen months ago, we asked a federal court to review the PolyMet land exchange to ensure it provides an equal value exchange for taxpayers and public land users,” said Hoffman. “Attempts to derail this review through congressional action have stalled the finalization of the land exchange and delayed justice for Minnesotans. This could have been done by now.”

The defeat of the measure is a blow to Sen. Smith, who has taken considerable heat from DFLers for her support of the controversial provision. Gov. Mark Dayton appointed Smith to her Senate seat in January and she faces an aggressive primary challenge from University of Minnesota law professor and frequent cable news contributor Richard Painter.

Painter has come out strongly opposed to proposed copper-nickel mines in the region and has sharply criticized Smith for her support of the land exchange as well as her connections to Glencore, the international commodities broker behind the PolyMet project. Glencore is currently under investigation by the U.S. Justice Department for alleged money laundering and violations of the Foreign Corrupt Practices Act.

Maccabee said she does not know whether the investigation, which was reported two weeks ago, played a role in the decision to remove the land exchange provision. “This has become a national issue,” she said. “Across the country, people are becoming aware of this effort and the risk of intervening in judicial processes. People understand that things like this set precedent.”

The news comes just over two weeks ahead of the Aug. 14 primary, and GOP-endorsed Senate candidate Karin Housley was quick to pounce, calling Smith’s support for the measure “thinly-veiled political pandering.”

“With the economic viability of real communities and the livelihoods of real people on the line, Tina Smith simply could not deliver,” said Housley.

Meanwhile, the group Jobs for Minnesotans expressed thanks to Smith, Klobuchar, and Nolan, for backing the measure. “We’ve worked continuously together, and we know how committed they have been to getting it done and that our delegation remains resolved to continue their efforts,” said Nancy Norr, a spokesperson for the group. “Supporters of economic development in our state through responsible copper-nickel mining are resilient and remain hopeful that there will soon be full congressional affirmation of the U.S. Forest Service’s past decision on the land exchange.”

The House-Senate conference report on the NDAA will now go back to both the House and Senate for final action. While that could offer the opportunity to re-attach the provision, such a move would be highly unusual.