Power plays go beyond hockey on the Mesabi Iron Range

PHOTO: Jack Amick, Flickr CC

Aaron J. Brown

Aaron J. Brown is an Iron Range blogger, author, radio producer and columnist for the Hibbing Daily Tribune.

This week the state hockey tournament takes place in St. Paul. This sporting spectacle doubles as a cultural celebration for the people of the North Star State. Once, the whole state bowed to the gods of hockey from our beloved blue collar Mesabi Iron Range. Today, however, the big suburban schools dominate the competition.

The complex reasons for this may be described quite simply. Since 1980, the Iron Range has been skating shorthanded while all the players in the penalty box moved away. That doesn’t mean we don’t see power plays in our neck of the woods. We just aren’t the ones enjoying their advantages.

For instance, as dawn warms another late winter morning in Northern Minnesota, the sun illuminates the red steel girders of what will become the state’s tallest bridge just outside Virginia. This $155 million behemoth of Iron Range infrastructure will soon become the most expensive public project in our lifetime.

Part of a new $230 million rerouting project for Highways 53 and 135 connecting Eveleth, Virginia and Gilbert, the enormous new bridge stands as a testament to the region’s commitment to mining. Yes, the state was obligated to move the highway due to a 1960 lease agreement with those who own the mineral rights. But the state ultimately chose one of the most expensive ways to do so, in deference to the mine’s request that the bridge not cross over mine land.

In doing so, Cliffs Natural Resources told us that the new route of the highway would add years of life and hundreds of millions of dollars in economic impact to its United Taconite mine in Eveleth.

Indeed, coming out of the nasty 2015-16 downturn in the iron and steel industries, United Taconite reopened to much rejoicing here on the Iron Range. On Feb. 25, the Laurentian Chamber of Commerce awarded Cliffs its “business of the year” award.* Among the reasons cited were Cliffs commitment to investing in this region.

Cliffs CEO Lourenco Goncalves accepted the award, but not without a power play of his own. Before the banquet, he gave an interview about his company’s plans to invest in direct-reduced iron processing. As you might recall, Goncalves and Cliffs announced last summer they wanted to build a value-added iron plant near Nashwauk on the site of the bankrupt Essar site, now controlled by the reorganized Mesabi Metallics.

That project and Cliffs’ interests in it continue to be mired in bankruptcy court, something most observers predicted could take years. Nevertheless, just nine months later Goncalves told reporters that the DRI plant location is now up for grabs.

“If it’s going to be here, it’s up to Minnesota,” he said in the Jerry Burnes story last week. “A year ago, it was Minnesota’s to lose. But now, it’s for Minnesota to reclaim.”

Now, keep in mind that Gov. Mark Dayton has done everything in his power to help Cliffs. The only thing that has changed is that local governments like the Nashwauk City Council, along with Sen. David Tomassoni (DFL-Chisholm) and Rep. Jason Metsa (DFL-Virginia), have signed resolutions or letters supporting Mesabi Metallics bid to keep the leases. Many contractors view Mesabi Metallics as the only way to recover the millions they are owed by the former Essar Steel Minnesota.

Cliffs has every reason to stop a new taconite pellet plant on the Mesabi, but market conditions will determine the timeline for completing a DRI plant in Nashwauk or anywhere else along the Mesabi. Goncalves rightly points out that the Iron Range must convert to DRI capability to remain relevant. So, why is the former Butler site the only place where it can happen? Why is such a close, important partner in the economy of our region threatening to take the future of iron ore processing somewhere else?

Goncalves has good reason to get the best deal he can out of the state and limit its competition. His company only recently begun digging itself out of massive debt incurred from the steel downturn. Anyone who follows the mining industry knows that you’ve got to corner the market and make bank when ore prices are on the upswing. Indeed, with iron ore now priced at $88/ton earlier this week, companies like Cliffs are poised to make some real money.

But if this is a hockey game, it should be abundantly clear by now that the Iron Range is skating a shorthanded third line into the maw of the Minnesota Wild. We control neither the pace of the game, nor its rules. We react, never able to marshal a strategy of our own. Any hockey coach knows that’s a recipe for defeat.

This should remind us that no one will truly love or care for the communities of the Iron Range and their long term interests better than the people who live here. Mining still dominates this region’s industrial landscape, but this example shows that we must also check the power of the mining companies in our public discourse.

We can’t love the mining companies into doing what we want. Indeed, hopes that total mining jobs will ever again match the early 1980s are far fetched. We can, however, love our communities into places of pride and new ideas. Indeed, this is the best chance we’ve got to start winning titles again.

Aaron J. Brown is an author and college instructor from northern Minnesota’s Iron Range. He writes the blog MinnesotaBrown.com and hosts the Great Northern Radio Show on Northern Community Radio. This piece first appeared in the Sunday, March 5, 2017 edition of the Hibbing Daily Tribune.

* CORRECTION: The printed version of this piece suggested that Cliffs had won the Laurentian Chamber of Commerce Business of the Year award instead of a small local business. The Laurentian Chamber, in the comments below, has corrected me. The chamber awards small and large business of the year designations. Cliffs won the large business award.

Comments

  1. Ranger47 says:

    Strange article. Such an unproductive contentious tone.

  2. Jaimie Niska says:

    The Laurentian Chamber of Commerce actually awards a Large Business of the Year award as well as Small Business of the Year award. Cliffs was named the Large Business of the Year.

  3. Gray Camp says:

    What is Cliffs status regarding DRI pellets at Northshore? News stories when they came back on-line seemed to say they were going to roll directly into DR feed production. I found that a little hard to believe, but maybe it is true?

    I don’t know what to make on Goncalves remarks. On the one hand it feels like he is trying to extort Minnesota into giving him Essar for pennies on the dollar. It kind of rubbed me the wrong way hearing him say what he did. On the other hand, if Cliffs were to invest in DRI at one of their existing plants, Tilden would probably be the most realistic candidate. I believe the Essar/Butler ore is a richer ore that would lend itself to DRI pellet production easier than say Utac would. Utac is already doing a large construction project to make flux pellets to cover for the market that Empire had. Cliffs doesn’t really own much of Hibbtac, so they can’t on a whim decide to start making DRI pellets there.

  4. Aaron, thank you for reiterating your points with another great analogy. Until we can coalesce on common interests to our community and stop bickering with each other, we will not be able to establish ourselves in the position of power. There are a number of efforts going on to bring people together and hopefully people will buy into these efforts.

  5. Also note that Minntac has issues with sulfate leaching from its tailings basin. As reported by John Myers in the DNT– The company said that, if the regulatory issues aren’t resolved “U.S. Steel could be required to make significant and unnecessary capital investments in Minntac that could put the facility at a competitive disadvantage, threatening the future viability of the operation and the jobs employed at the operation.”
    Although the current sulfate standard is 10 milligrams per liter, none of the taconite plants have been required to meet that standard. Again, from the Myers article ,” Past testing showed Minntac emitting sulfate levels as high as 1,320 milligrams per liter, with an average of 954 milligrams per liter. ” (US Steel seeks court action on Minntac permit)
    The company tactic is to threaten closure if the state requires them to meet standards. On the other hand, the state is at fault for allowing this noncompliance to go on for decades.
    Taconite mining is being subsidized by the pollution of our environment.

  6. Joe musich says:

    Not good to see the area of my birth still being held “hostage” for the small number of jobs created or the wealth that is left in the communities. None of logical arguments for public health protection or increasing diversity seems to have taken hold. The land itself bounces from one corporation to another who essentially sit on it to ensure mineral rights. Maybe there ought to be some sort of time limit on mineral rights ? But hey we live in the land of private property. Has any government declared eminent domain against a major corporation ? Are the citizens up there co-beneficiaries in this process ? Not then, not now.

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