Electric arc furnaces like this one at a Nucor plant in Alabama have already revolutionized the global steel industry. The fact that Minnesota’s Mesabi Iron Range is still mostly feeding older blast furnace technology is a big problem. (PHOTO: Jeronimo Nisa, Flickr CC)
I know, there’s plenty we could talk about regarding controversial copper-nickel mining projects in Northern Minnesota. PolyMet has a draft permit to mine. Ely’s Twin Metals got a symbolic boost from the Trump Administration. Persistent and largely meaningless slap fights between mining advocates and skeptics color the pages of the local press.
But the truth is, capital will determine the way forward on these new projects. And there’s little sign that the new forms of mining will operate as consistently or have as much impact as our region’s venerable iron mining industry. It is my belief that years from now we will regret these wasted years. Our screaming battles divided our region and destroyed coalitions that could have built stronger communities.
Don’t take that as opposition to mining, however. It’s just that I’d rather focus on the most important challenge that actually faces mining regions like the Mesabi Range. The only regions like ours that endure over time are ones that develop new, innovative products that add value to commodities like iron.
Lee Bloomquist, writing for the Scenic Range News Forum, profiled work being done at the Natural Resource Research Institute in Coleraine. The story included this key passage:
“We still consume steel as a country,” said Peter Clevenstine, Minnesota Department of Natural Resources Lands and Minerals assistant director. “The United States is one of the largest consumers of steel in the world. But the iron ore pellets we produce can only be used by the blast furnace segment, and electric arc furnaces continue to take a larger part of the steelmaking business. To grow this market, you have to get into DRI.”
Therein lies the opportunity for Iron Range mines.
Iron ore pellets made in northeastern Minnesota will continue to feed blast furnaces for decades to come. But the number of blast furnaces in the nation is shrinking. And making a value-added iron product in northeastern Minnesota would be more cost effective for domestic EAF operators than imports, and not have a significant impact on the production of iron ore pellets.
“It’s absolutely needed,” said Donald Fosnacht, NRRI associate director. “In the last 10 years, 12 blast furnaces that consumed 12 million tons of iron ore pellets each year have closed in the U.S. As the smaller blast furnaces continue to go down, they’re going to be replaced by electric arc furnaces.”
Last month, I wrote about the continuing saga of the Mesabi Metallics project in the western Mesabi Range town of Nashwauk. It appeared that Cleveland-Cliffs had honed in on the new company seeking to resume construction on the site of an iron mine. But Mesabi Metallics, now owned by Chippewa Capitol Resources, responded by announcing their emergence from bankruptcy. Both say the other company’s news is not as important as their news. Truth is, we are watching a long game play out.
Whoever executes it, the still unrealized Nashwauk project is the most ambitious effort to create new iron ore products. But other Range mines have already started efforts. Cleveland-Cliffs continues to pilot the production of DRI at its Northshore mine in Babbitt and Silver Bay. And Cliffs still touts its “mustang” pellet at United Taconite in Eveleth. That, however, remains more of a specialized taconite pellet than DRI.
Readers here know that I preach economic diversification as the most important goal that Iron Range communities should pursue. That’s because technological changes in the mining industry no longer support entire communities the way they did decades ago.
But if you’re going to focus on mining, you must prioritize the modernization of our proven and enduring iron mining industry. Nothing related to mining will create and protect more jobs than that. We must close the loop between selling what’s under our feet and inventing and manufacturing products ourselves.
If we do that, our descendants will remember us fondly. If we don’t, most of them will live somewhere else.
Unfortunately the capital investments required for any large scale industrial development project (not just mining) in our area is tough to attract due in large part to our reputation of having an indecisive and long permitting processes in the state of Minnesota. I am not saying these processes shouldn’t be rigorous and complete but there needs to be some certainty in how the process will work. Minnesota’s bureaucracy is second to none in all the wrong ways… well maybe California.
The state pulled out all the stops for Essar. They’ve got permits. What’s lacking is a cohesive industry strategy (though Cliffs has articulated a company plan, but doesn’t yet have enough money to pull it off).