If you don’t like reading about steel or bonding bills, sorry, today’s not your day.
As expected, Range leaders came out today stating that Pawlenty’s amount proposed for the proposed Nashwauk steel mill was too low. What I didn’t realize earlier was that more than 2/3 of his proposal involves money from the 21st Century Minerals Fund or other permanent mining funds, not actual bonding. This project is about mining, but also about value added mining with the addition of a steelmaking operation. I think there’s a good argument that such a transition in the steel industry would be worth a more substantial bonding investment by the state. There is going to be heavy negotiations on this issue before the final bill comes out, but it seems something will come together … so long as the company is fully with the program (as of now, this is unknown).
From today’s Duluth News-Tribune:
Lawmakers: Earmark for infrastructure near Nashwauk steel mill falls short
Duluth News TribuneGov. Tim Pawlenty’s bonding proposal released today includes $30 million for a planned Iron Range steel mill near Nashwauk.
The money would help develop infrastructure for Minnesota Steel’s proposed $1.6 billion taconite, direct reduced iron, and steel mill.
However, the money is less than half of the $67 million requested by Itasca County for the project.
DFL lawmakers from the region say that Pawlenty’s earmark is a start.
“At least he didn’t shut us out completely,’’ said Sen. Tom Saxhaug, DFL-Grand Rapids. “The good news is that we’re included. The bad news is that we have to go get more money.’’
The 2.5 million ton–per–year steel mill would be the first of its kind, producing taconite, reduce iron and steel slabs at a single site.
If built, it would be the largest industrial project in the state, requiring 2,000 construction workers and 700 permanent employees.
Essar Steel, an Indian steelmarker, last year bought control of the project from Minnesota Steel, a group head by the Longyear and Bennett families of Iron Range mining fame.
Rep. Tom Anzelc, DFL-Balsam Township, said Monday that Pawlenty’s inclusion of the project is the beginning of further discussions.
“It’s to be negotiated,’’ said Anzelc. “It does not appear to do the job, but it’s the first step in a complicated negotiation process. It’s likely that once we get a sit-down with the people of Essar, perhaps some of this will clarify.’’
Iron Range legislators in January hope to meet with Essar Steel officials, Anzelc said.
Not all of the $30 million would come from state bonding, Saxhaug said.
Pawlenty plans to take $15 million from the Minnesota Minerals 21st Century Fund, $9 million from Iron Range Resources funds, and $6 million from general obligation bonding, Saxhaug said.
Of Itasca County’s $67 million request, Pawlenty trimmed $9.2 million from a $23 million natural gas pipeline, reducing it in physical size from a 24-inch diameter pipe to 16 inches. He also cut a $15.7 million roadway request to $3 million and recommends that a $16 million substation line be privately funded. Pawlenty increased an administration and contingency fund to $3 million from $2.4 million.
We must not forget that last year our legislative officials were only asking for $30 Million dollars. Aaron, jog Tom Anzelc’s memory on this one. It wasn’t until June, 2007, that Ron Dicklich mumbled in a Itasca County Rail Road Authority meeting that $67 Million was needed. (I wonder how many people realize that a lot is said in the ICRRA meetings that really should be brought out in the general Itasca County Board meetings. Could it be because its not televised?) And Itasca County taxpayers, watch out for the “general obligation bonds”! With the economy going bust, so will this plant and we will all be paying for it!
Amanda
Yes, like I said a post earlier I need to see how the money is assigned to actual spending before I endorse $67 million. Actually, the bigger issue is getting Essar to the table to see what they need/expect. I agree, there are a lot of consultants working in connection with local units of government to try to get a piece of the pie here. If the steel mill is to be built, Essar needs to step up and when they do, the state will respond … probably with something much closer to $30 million.
This project, like all of these big projects, is dependent on market forces more so than the whims of any public official. That’s not a traditional thing for a Iron Range Democrat to say, but it’s true.