NY Times paints grim picture for Iron Range mines

The Hull Rust Mahoning Mine Pit located just north of Hibbing, Minnesota. (PHOTO: Lars Hammar, Creative Commons license)

The Hull Rust Mahoning Mine Pit located just north of Hibbing, Minnesota. (PHOTO: Lars Hammar, Creative Commons license)

A business story in yesterday’s New York Times carries this headline: “If It Owns a Well or a Mine, It’s Probably in Trouble.”

And since that describes many of the largest businesses on Northern Minnesota’s Mesabi Iron Range, we can rightly take warning.

Companies that produce commodities — oil, iron, copper or the like — are absolutely reeling right now. It’s not just “another down time,” but rather historically bad. And sure, dumping is a big problem, but only part of what is essentially a global supply glut and a major long term slump in demand.

Commodities in 2015 and 2016 are not exactly the same as having a trunk full of Beanie Babies that you paid $1,000 for in 1997, but it’s more like that than most of us in Northern Minnesota would want. And just like getting Beanie Babies to be worth $1,000 again, getting iron ore back up to the $80/ton price we like to see here will extraordinarily difficult without a big increase in demand.

The price of gas when I drove into work in Hibbing today was $1.85. It hasn’t been that low since I was driving to Superior every day for grad school 12 years ago. And lower oil prices means less demand for the domestic steel that is the only reason Iron Range mines can compete at all.

The question becomes will a Congress that is likely to remain Republican-led for a few more cycles be willing to close off international steel trade to preserve our American steel industry? Keep in mind, there are many powerful figures in our country who like cheap steel. They would say that cheap steel helps save American jobs in their industry.

If you watch the local news you hear citizens and even some leaders say things like “We have to get the mining industry back up and running.” And while that would be the economic ideal, we would be irresponsible if we didn’t prepare for a world that will need far less iron ore from Minnesota than at any point since the turn of the 20th Century.


  1. I support raising emergency tariffs on foreign steel – as Bush did – as well as the 5 year moratorium on steel imports proposed by Rep. Nolan. As a matter of principle, US companies and workers should not have to compete against China’s heavily subsidized and very polluting steel industry.

    That said, steel is very recycle-able and at some point, human civilization will have most of the steel we need above ground, and demand for new steel from mineral deposits will decline to the amount needed to replace that which is lost to rust and general entropy.

    That – and the possibility that steady state economic theory is correct that human civilization will eventually and out of necessity reach a plateau of economic development where economic activity transitions to maintainence rather than rapid expansion once living standards in developing countries catch up with those in the developed world. Either that, or we completely destroy human civilization through climate change and over population.

    • Which is a long way of saying that in the long term, the average demand for new iron from mining will contract and stay there.

    • The tariff issue was relevant a few decades ago. Besides, demand is international. Demand is no longer domestic. So, how does taxing imports change anything? Where do you think the finished steel was going?

      There is an entire economy outside of steel which has completely adjusted to the global marketplace and free trade policies. The best thing to do now is increase consumer demand for products produced fairly.

  2. It is a question of national security. We cannot depend on steel from Australia for our ships, plans, military materiel. China seeks to control shipping lanes in that part of the world. If we close our mines and depend on foreign steel we could find ourselves in desperate straights. We need tariffs now to keep our mines going.

    • Agreed!
      We grow dependant on Chinese steel – while China grows increasingly militaristic in the pacific – at our perril.

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