Steel barons of the 21st century

This is my weekly column for the Sunday, June 8, 2008 Hibbing Daily Tribune. It was held over from last week because Essar made an announcement reiterating their commitment to the Minnesota Steel project just beforehand. My original sentiment remains, though; the Range must not depend on large steel companies or consultant-driven projects to deliver all the economic growth we actually need.

Steel barons of the 21st Century
By Aaron J. Brown

Right now Iron Rangers are waiting for news about our future. We need to stop waiting and start planning.

You hear the sound of people waiting in our cafes, bars and gas stations. “Things sure will be better when they get that steel plant by Nashwauk,” the kind waitress or good-natured clerk says. You hear the sound of waiting in the real estate ads in the paper: “Steel plant coming, buy today,” they boast. Often, the specifics become rather hazy. “New stuff coming,” someone says. “Should be better around here then.”

Indeed, fortunes will be better on the Iron Range when there are more jobs, a stronger and independent economy and a more contented population. But that’s nothing new. And yes, Minnesota Steel’s parent company Essar announced plans to begin the first phase of construction this summer, declaring their intent to build the first-ever mining and steel making operation on the Iron Range. Still, we still find ourselves waiting, watching distant decision makers ponder their options, our fate.

Most know that Essar, an Indian company with holdings all over the world, announced last year it would buy Minnesota Steel to advance the longstanding concept of an integrated steel and mine facility near the former Butler Taconite location. Essar has been held up during the financing process, which delayed what was supposed to be a spring groundbreaking for the first phase of the project. Now, Essar is further tied up in a vast battle for market share in the North American steel industry. They bought Canadian-owned Algoma Steel around the time they bought Minnesota Steel and have recently been trying to close a deal to buy the major American steel company Esmark, which would give them vast steel making capacity on the continent. Meantime, competitor ArcelorMittal is fighting that deal, trying to make its own deal and may end up cutting some kind of deal with Essar. Confused yet? Here are two names we Rangers might remember. Rockefeller and Carnegie. Throw in J.P. Morgan for good measure. Unless you’ve got stock in steel companies (and check your 401(k), you might) the most important detail is that powerful companies elsewhere are battling for the biggest piece of a global pool of capital, resources and power. We are just one part of their big plan. The only difference is that the seat of power is moving from New York to India.

Why India? India is hungry and ambitious; we are waiting.

It is not my intention to be overly pessimistic about the steel plant or other developments. I will be among the first to welcome Essar when it opens Minnesota Steel operations. Indeed, it makes logical sense to make steel in the same place where the iron ore is mined. If the international demand for steel continues as some forecasters predict, this steel project and the local mining industry in general could enjoy a decade or two of relative comfort. But that is the rosiest of scenarios and our parents and grandparents raised us to work hard and be smart. Fact is, corporations – whether Indian like Essar or American like Cleveland Cliffs – conduct operations here on the Iron Range because they need our ore to do business. Business comes first; the real estate market in Keewatin, the fate of Greenway schools and the health of our small business sector are far more distant concerns to the people who run these companies.

What was true of the Range in 1908 remains true in 2008. The powerful play chess with our lives so long as we let them. Strip away development dollars, speculative pricing and the bevy of consultants whispering in our ears and you will find a familiar group of people at the heart of the Iron Range. They are the same people we see at the café, the bar, the gas station, the bank or walking down Main Street. They are us. While it may be true that we should have patience in regard to coming steel plant or any number of other job creation projects, we must not wait for our futures to materialize. We need to explore ideas, create homegrown growth and teach our children this new lesson: good things come to those who dream, think and work.

I archive older columns at my writing page.