Beating the bumps in an Iron Range mining boom

I’ve recently advocated a sort of temperance in talk that boom times in mining are enough to propel the economy of Minnesota’s Iron Range forward. That’s not very fun, or very popular, or very important, I suppose, as the economy will react independently of what some blogger writes or what you see on your computer screen or smart phone. But a recent international stories might explain my caution.

I’d previously written about Australia’s steel industry woes as a warning to our own. Now global iron ore prices are expected to drop this year, according to Dow Jones as reported in the Australian press.

There are many reasons why the American steel industry is better positioned than Australia’s, and why demand for steel will continue and thus ensure that Range taconite operations will continue long past the price fluctuations. But local euphoria remains over many proposed mines and projects, most of it rooted in the fantasy of the 1990s: that a return to 1970s-level mining employment is possible.

The process of taconite industry consolidation, efficiency and mechanization that began 30 years ago has rendered such a thing impossible. What remains is a more sturdy iron mining industry, better prepared to last much longer, but that will forever employ a more or less limited number of people.

In other words, while the House of Iron Range Taconite might be well-built, like any house it has a ceiling.

To be considered separately from this are the proposed nonferrous mining projects. These projects use different technology, would be owned and operated differently and involve commodities even more economically volatile than iron. The potential for jobs is there, but that potential requires even more context and consideration before being realized. Nevertheless, I mention these projects because people who actually live on the Iron Range generally group them with the taconite jobs they know and love.

It’s bad practice to simply wait for new mining jobs to be created, or, more accurately, wait for political pressure to build to expedite a permit process snarled on important questions, which might allow financing to possibly create jobs (depending on mineral prices). There are too many moving parts to that equation and, while the issue must be resolved, I am always disappointed to see local governments pass resolutions of support for mining and then sit back and wait, sniping at criticism as though it were some existential threat. A more functional region would be working on other ideas while all this was going on. The fact that this isn’t happening is, in itself, the real existential threat.

Back to iron mining, still the region’s best and most tested employer. One of the big “oh boy!” projects on the Range these last two decades has been the proposed iron mine and steel mill by Nashwauk, a project that had lingered in spirit form through the ’90s before being purchased and recently developed by the Indian steelmaker Essar.

Essar Minnesota has prepared the site, poured footings and is now getting important permits to begin construction. It has encumbered and spent a great deal of state and local money on rail and road infrastructure, all of which is visible to travelers in my neighborhood north of Nashwauk, Minnesota.

But buried in a routine report on the project’s permitting success, Essar officials revealed to several local boards this week that the project would nevertheless be delayed. Taconite production will be held up until the summer of 2013 and the steel mill is on the distant horizon, so far out that I’d argue it’s not responsible to assume it is a sure thing. The main problem: global financing. The secondary problem: steel prices are good, but not great, and steel mills are expensive.

Perhaps my caution is unmerited. I suppose I could end up eating a lot of crow on this, watching Canadian National trains loaded with steel bars and copper rolling down to Duluth. But caution is where I’d bet my paycheck right now; indeed, we who live on the Iron Range are betting our paychecks with every public decision made on these matters.

A more useful approach for us to take, whether we support or oppose new mining and the inherent environmental consequences, would be to work on what we see around us. Our towns must be more inviting. Our people could be better cared for. Our students could be introduced to deeper and more responsive curriculum.

It is often said that “Jobs” are the Number One Issue. True, jobs are necessary for any of this to work. But we don’t just need the “x” number of mining jobs; we need three other permanent jobs for every mining job created. Those jobs are no sure thing. They must be grown. We must start with our communities and schools, using the resources — however limited — we have available to us now. Doing this gives us better options in the event of sour mining news and greater prosperity if mining flourishes.

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