Magnetation still considering Range, Superior sites

The saga of Magnetation’s proposed pellet processing plant at one of four proposed locations continues. It would appear from public discussions that the company is focusing on finding ways to keep the site in Itasca County in Minnesota’s Iron Range region or locating in Superior, where a recent economic boom has been happening.

Minnesota and local Range officials have been communicating with Magnetation after a rather negative early reaction to news that Magnetation was considering other options. My understanding is that there is a way for Magnetation to locate in Minnesota under current regulations; it is just that there has been a lack of communication. Magnetation also alleges a lack of urgency, though the state differs on that. I think the publicity of this situation has accelerated the efforts of both Magnetation and state regulators to address the issue. There remains a good possibility of the plant locating on the Range, though Superior certainly wants it and probably remains an equal possibility.

Meantime, Magnetation is addressing some of the anger exhibited by some Range lawmakers when news of the story first emerged. Last week, the company issued a press release showing how the company’s scram mining operations have already paid back the public investment in the projects.

To date, 213 jobs have been created by Magnetation, more than ten times the original commitment to the State of Minnesota. The average pay, including wages, benefits, and pension contributions, for the Magnetation direct employees is $70,096 per year. In addition, there are another 60-100 direct and indirect jobs being created at a third Magnetation plant near Chisholm, owned by Mining Resources, LLC, a joint venture with a subsidiary of Steel Dynamics Inc. The construction jobs created to build out the various Magnetation facilities are in addition to the foregoing job totals.

In total, Magnetation received four loans from the IRRRB and one loan from DEED with a combined principal of $5,753,191. On January 3, 2012, Magnetation made the final payment to retire all loans in full, much earlier than required by the loan agreements. In addition, Magnetation has paid to date $946,089 in combined interest and special process royalties to the IRRRB and DEED. In 2012, Magnetation expects to pay an additional $2.5 million in special process royalties to the agencies based on concentrate production from the various Magnetation plants.

Last week I recorded a conversation with Scott Hall at 91.7 KAXE about Magnetation, the Iron Range and Superior that will air at 7:20 a.m. on the Monday morning show. Though some time has passed the central issues we talked about remain at the forefront of this story. Tune in or listen online to the Magnetation discussion Monday morning on KAXE.


  1. “Rukavina said it’s “just plain greedy” for Lehtinen to threaten to take the jobs elsewhere after everything Minnesota has done to help Magnetation get going. In response, he said, he’d consider trying to raise the state’s tax on iron ore-concentrate shipped out of state before it’s turned into pellets”. -DNT

    Does this sounds “business friendly”? Why oh why do Range legislators have to be so against those who create jobs?

    All things being equal, which they aren’t (with the raw material being on the Range), but if they were, you can bet Lehtinen has no interest in dealing with the likes of fist-clinching union thugs.

  2. I agree.


  3. I listened to your Magnetation discussion on KAXE Aaron…You sured did struggle with finding words to avoid saying how “anti-business / pro-union” the Range is, both historically and yet today.

    We all know this is the big elephant in the room. Lehtinen won’t say so for obvious reasons…but as a private citizen/journalist, you could. But yet, you didn’t.

    Too bad…you could be a strong voice for the change that’s needed. You’d have a greater following than you realize.

    This is a wonderful example of what one individual could do to lead the change that’s needed, to speak up, to say what must be said, in a positive way…yet won’t. It’s in part why it’ll be a long time before we have hi-speed internet in Balsam.

  4. Rukavina’s overreaction was not the reason Magnetation floated Superior. We’ve gone over this so many times about “pro-business” and what that means over the years on this blog that it does not bear repeating. What does that mean? For some, regulatory reforms. For some, necessary infrastructure and education. For some, kissing ass.

    Magnetation wanted speed in its permit process. That much is clear. They didn’t reach out to Minnesota permitting agencies or file any requests until they had their big announcement, however. That suggests a strategic decision (one that will ultimately work well for them.)

    They pitted Superior against the Range to speed up the permitting processes in both states, and to get people falling over themselves to get the best deal.

    Good for them. Not a great public policy moment, but there aren’t many of those these days.

    Since you are so fond of criticizing me and my approach let me offer some thoughts on yours. You are utterly and completely incapable of understanding nuance and subtlety. I said all the things you said, only I said them in a way that — I believe and hope — gets the necessary people, many of them Democrats, to modulate and change their behavior in a way that makes Magnetation and more *actually happen*. If you don’t see that, you’ll never see it.

  5. Being subtle…

    Reminds me of what Jason once said –

    “Somewhere in the back of my mind, some wires got crossed and I started thinking that being subtle was the same as having class, being sophisticated and taking the “high road.”

    Of course the real reason was that I was probably scared of getting noticed. If I’m not subtle then people will notice me. And if they notice me, there’s a chance they won’t like what they see. And who could ever recover from that type of rejection?

    See how vicious that is?

    In business, falling into a cycle like that means you end up doing the equivalent of whispering with your sales and marketing staff. You end up saying things like:

    “Excuse me sir, would you maybe, possibly, by any chance have a need sometime for something somewhat like what I might be offering to you someday, like maybe today?”

    That kind of approach makes you want to whip out your credit card doesn’t it?”

    Sometimes it’s best to be subtleless, especially when peoples lives / livelihoods are at stake.

  6. Jason? Well, anyway, I appreciate the effort.

    I’ve been clear about times when I think things are right or wrong. I don’t know exactly what it was you wanted me to say about this issue, but I did say what I actually thought.

    Your complaint with me appears to be tactical. You don’t like HOW I say something or do something. I really can’t really be bothered by that.

  7. Now I disagree (with Ranger47).


  8. The Rudstroms are a great example of clarity Aaron. We know exactly where they stand. No subtleness, straightforward. Rangers appreciate that.

  9. I agree. Have a good day, Bob. You too, C.O.

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