Global view of iron ore casts dim light on the Giant Mesabi

A shovel loads a haul truck at the Roy Hill Mine in western Australia, which will soon put 45 million annual tons of iron ore into the global market. (PHOTO:

A shovel loads a haul truck at the Roy Hill Mine in western Australia, which will soon put 45 million annual tons of iron ore into the global market. (PHOTO:

What’s happening on the Iron Range right now is much like the calm before the storm, or the eerie quiet of a city soon to be under siege. We know that come June nearly 1,200 iron miners will be out of work, with many more likely to follow. We’re not confident when people will be called back. Estimates range from eight weeks, to four months, to two years. We only know this is the first time in recent memory Range mines have been shut down by international economics and trade outside of a traditional U.S. economic recession. Most of the country will enjoy modest growth this summer; but not us.

But that’s not terribly shocking. It’d be a stretch to say we enjoyed a meaningful recovery at all after the recession of 2008-2009. Sure, the mines came back a’ blazing, hiring new workers to replace scores of retirees and hitting huge production numbers. Yet the region’s economy remains imbalanced.

Socked for 30 years socked by declining population and school enrollment, along with growing automation and cost reductions in the mining industry, the Iron Range has become dominated by low-income workers who lack college degrees, much like it was 100 years ago. These are real people, raising kids and paying rent all around us. I count among them close relatives, friends and students. Ask around and you’ll be hard pressed to find many in this class who’s lives have improved dramatically in the last 15 years, must less the last six. It’s harder, not easier, to afford college. Rent has gone up, not down. Groceries, insurance, gas — all up. Even me, an (over)educated professional with a “khaki pants job” in town has seen almost total wage stagnation during this time, any gains made through extra work reversed by the skyrocketing costs of everyday items.

So, what the iron mining crisis of 2015 (and 2016?) really means is that leaders of business, political institutions and communities will have to recognize what they’ve so far managed to ignore. Despite record-breaking taconite production levels, we have not solved the economic problem that hit the Iron Range in 1982. It is here. Economic development efforts so far have at times stanched the bleeding, but have largely failed the core goal: preparation for a post-mining Iron Range.

Like anyone on the Iron Range, I hope for short shutdowns at MinnTac, KeeTac, Magnetation and Mesabi Nugget. I hope Cliffs-owned mines in Hibbing, Eveleth, Babbitt and Silver Bay avoid layoffs. I even hope we see iron mining in Nashwauk again. But I am less optimistic about these things than even a couple weeks ago, and I’ll tell you why. I’ve been casually reading the international coverage of iron and steel around the world. Sure, iron ore prices are dismal and getting worse, and those low prices are spurring illegal steel dumping in our country. These things have happened before, though. One needs only to endure the blow and get back up, right?

This time is different.

A reader, Don Brown (no relation), tipped me off to a series of podcasts produced by the BBC. “Elements” is a business podcast that explores the intersection of commerce and the scientific table of elements. They couldn’t fit iron in one show, so they made it a three-part series.

The first episode, “The Industrial Revolution,” is a fascinating look at the development of iron (dating back to the explosion of distant stars, a favorite topic of mine). We learn how humans forged early iron, wrought iron, and eventually modern steel. I’d recommend it for its historical value and to provide the basics on how iron ore actually becomes the steel we use every day.

The second episode, “Iron and Manganese” gets into the science of modern steel, explaining how alloys make the vast array of steel products used today. It’s good too, and I’ll get to that in a moment.

But the episode that you should all listen to is the third one, “Industrialisation.” If you live on the Iron Range it should rightly scare the crap out of you.

For one thing, the episode shares the views of steel industry experts from around the globe — many of whom believe that iron and steel prices will stay low for a long time. In fact, they’re observing that industrialized nations need less new steel as they continue developing. Some steel industry types counter that these views are overstated, but the most confidence comes from mines producing lowest cost ore.

I referenced the other episode about steel alloys. They talk to steelmakers in Sheffield, England, where they’re making steel at the same site where pig iron was first produced 200-some years ago. The difference? They make high quality, speciality steel demanding meticulous science and precision. They make their higher cost of production worth it.

So that brings me to my point.

Without adding value to our iron products, traditional Iron Range taconite plants will continue to lose market share. Some, not all, will carry on, but with less production and far less employment. If one is serious about Iron Range mining we must make taconite, iron nuggets, pig iron and, yes, steel itself to remain viable on the world stage. We must explore 3-D steel printing, custom manufacturing and anything that uses our local natural resources to create low-cost products in high demand. Our American iron and steel industries need not just agility, but innovation.

“We” means government, yes, but must also mean private mining companies, other industry and new entrepreneurs, engineers and scientists. Our research institutions must make this a priority, as the University of Minnesota did with taconite decades ago. When we fund projects that promise to make steel, we must demand they make steel or pay the money back.

Even with value-added iron products, we must diversify the economy. We must finish total broadband saturation in the Taconite Tax Relief Area through any expedient means, public or private. We must make our communities inviting to new kinds of people, new kinds of businesses, and creative entrepreneurs no longer tethered to offices.

I love the Iron Range and I respect the role mining plays in our history, our current economy and even our future. Some say I’m too bearish on this, that I’m too “negative.” Some powerful people have taken my work as a personal affront. To that I say that the most anti-mining, anti-job, anti-Iron Range option on the table is to shuffle along, hoping for the best, instead of working for change.


  1. Despite the MNGOP talk about strengthening Greater Minnesota, this week the House Job Growth and Energy Affordability Committee decided to put zero dollars into broadband funding.

  2. john gorski says

    I listened to the/a BBC broadcast talking about an Australian mine that is almost entirely automated. It’s production trucks have no drivers. Their current production cost is in the low $20/per ton range and current low prices are considered profitable and sustainable. Tough sledding ahead for the US iron industry. Aaron the range needs your bearish view. Keep it up.

  3. Brett Whitlock says

    AB, thanks for this wonderful article. I grew up south of Hibbing, Dad worked for Hannah and we had a beef farm. My plan was to graduate in 1982 and join the mines, the old follow in your fathers footsteps method. The economy nixed that plan so I joined the Air Force for 4 years then attended HCC, Bemidji State for a Bachelors in environmental studies, then the University of Wyoming for a Masters in Natural Resource and Regional Economics. I’ve worked at various jobs both in and outside the scope of my education and am now an agricultural specialist with Customs and Border Protection at the Minneapolis, St. Paul airport. Dad has been retired for some years now and the cattle are long gone. I have strong ties to the area and am saddened by recent events. What can I do to help?

  4. Excellent article.

    I have to struggle not to allow my views of the Range to be colored by she shenanigans of horrible pols like Saxhaug and Tomassoni. One knows, objectively, that pols in other parts are no less stooges of the industries in their districts. But the constant, heavy-handed, dishonest, attacks on environmental protections coming from these guys and their colleagues make the Range seem like a public nuisance….

  5. Mitzi Morris says

    We have been through this before and before and before but you are right – this time it does feel different. Great Article.

  6. Despite an attempt at a rosy spin in today’s Duluth News Tribune, copper mining is not a solution to diversification on the Range.

    Copper, like most raw materials, follows the same demand cycles as steel, responding to the same economic dips and rises. The current problems in the iron industry are mirrored exactly in the copper industry, with prices down 40% from five year peaks and more or less even, in real constant dollars, with lows from the 1990’s. Experts cited in the recent Thompson-Reuters metals newsletter expect this to get even worse, blaming a production glut and increased stockpiles.

    This is of course why Antofagasta has chosen to shelve the Twin Metals project for now.

    This situation is worsened by the fact that Range copper will, like Range iron, be the high priced source, once again because the low quality of ores will require extensive processing to create a useable product, while Australia and other countries offer richer ores that can be used with much less processing or even as they come from the ground.

    Copper will just magnify the severity of the cycle of boom and bust. If Polymet were up and running today, it would most likely be announcing layoffs or even closure to ride out the bust in copper prices.

    While mining will remain an important part of the Range economy for years to come, and copper, if it can be produced in compliance to existing environmental standards, will be part of that, if the Range wants to get off the extraction economy roller coaster and develop a 21st century first world economy that provides for its people, as Aaron has said many times diversification into fields with higher value added and a better fit with 21st century economics is necessary. And to drive that, we will need better education and better infrastructure, including wide access to the highest speed broadband and support of regional higher ed, from community colleges to UMD and the big U in Minneapolis. This will obviously require spending of tax money, but in other areas of the state this investment has more than paid for itself in economic growth and average take home pay that is higher after taxes than in low tax states.

    Politicians (and voters) need to realize that there is no free lunch: growth will require investment, including substantial investment of public funds from the IRRRB, the state, and from local governments.

Speak Your Mind


This site uses Akismet to reduce spam. Learn how your comment data is processed.