Steelworkers 4th of July float in Iron Range parade. PHOTO: United Steelworkers
It’s always fun to watch what happens when reporters from national publications come to the Iron Range to do major stories. Movers and shakers whisper in low tones about their possible motives, while others clamber for their one chance at being quoted in a paper someone actually reads (maybe?).
The results vary, but this time Ylan Q. Mui of the Washington Post has penned a clear-eyed, insightful feature about the global situation for iron and how it really affects people on the cold ground of the Mesabi Iron Range. (Read: “Financial turmoil half a world away is melting Minnesota’s iron country“)
Mui was on the Iron Range a little over two weeks ago, visiting mines, small town cafes and the homes of laid-off miners. She also connected with leading experts on commodities to put this story in context.
From Mui’s story:
IRON JUNCTION, MINN. — The railroad tracks that connect the 50-year-old iron mine here to the rest of America are hidden by a blanket of snow. On a normal day, a train would be plowing through the snow every three hours, carrying thousands of tons of iron ore destined to be melted into the steel frame of a car or the beams of a skyscraper.
But nothing has been normal in this region for nearly a year, when the mines began shutting down, victims of a global plunge in the price of natural resources that is upending the world economic order. Brazil is in recession. Australia is struggling to pay its debts. South Africa’s currency is plummeting.
And here in America’s Iron Range, the snow on the railroad tracks lies smooth and undisturbed.
It’s some of the same things we knew: China is overproducing steel to keep its economy afloat, while places like Australia and Brazil are producing much more iron at cheaper prices that the mines in Minnesota. That’s creating enormous pressure on American steel companies and the mines that supply their aging blast furnaces.
But it’s the way that Mui ties the human connection into the story that makes it worth reading. She again talks to Dan Hill, a local Steelworker who has acted as a sort of spokesperson for miners in this downturn. He’s in his 30s. Young family. Wife works at the hospital. He’s doing everything right. He’s been trained as a millwright, an airplane manufacturer and truck driver. Despite all the education and preparation, his hopes of staying on the Iron Range have encountered constant setbacks.
To which many would just say: “move.”
But for the people affected by this situation, that decision is more than economics, it’s a cultural transformation not unlike the driving forces that sent many European ancestors here a century ago. And for the communities of the Iron Range, watching people like the Hills move away would be devastating, perhaps more so than the exodus that happened in the ’80s, and the ’50s before that.
The international situation is just spooky.
On Monday the Financial Times reported on Chinese “zombie” steel mills with as many as 400,000 workers, pumping out steel at a loss because the government fears social unrest if that many people become unemployed. Frankly, those fears are justified.
I reported last week about how American ports are building for more steel imports, not less. Yet weeks ago, Business Insider reported on “zombie” ships sailing the oceans. These would be ships that are leveraged so deeply that their owners can’t make money even fully loaded with commercial cargo. Nevertheless the companies keep running their shipping routes because they need cash. In many cases they’re shipping “zombie” Chinese steel at a loss for both themselves and their customers.
That’s the damnedest thing. No one is making any money! Oh, executives are still getting paid plenty, but the companies have become money pits. The reason is debt and overproduction. Yet the companies continue going into debt and overproducing. Zombies!
The reason people fear zombies is because they can turn you into a zombie, too. This is the heart of the fear here in Northern Minnesota, where we hope the cold winters and deep woods would keep us safe. They can’t keep us safe forever. Dependence on this business model will probably never keep us safe again.
Mining needs to happen because/when ore is needed. Apparently these days, we can get ore from other countries for a lower price. So there go the mines. Well not so fast. Should we really be that dependent on other countries, friend or foe? Maybe if we are dependent on our foes, and perhaps they on us, we would think 3x before going to war. I think I read that one of the arguments made before the cabinet representative who visited the Range was exactly that we can’t let these mines deteriorate. The East Range “maybe-mines” also come to mind: Do we need this ore? If we are currently getting it elsewhere, is that cheaper, and why, and does that make us too dependent? If the mining is done in a clean manner, that’s one thing, but if we need to get at it in the heat of war, clean will become a lower priority. Near my house is a long abandoned granite quarry. Though it is tiny, it would take extra work to get rid of the dregs of former production. You don’t just dive in and restart old machinery. Granite is not a core ore necessity. But this quarry makes me realize what happens if a mine would be abandoned. [ditto, the mine lakes.]