Lost special session only one of Range’s problems

Metal profile and pipes on white background. 3d

Laid-off Iron Range miners will have to wait until the late start of the legislative session this March to see if the legislature will act to extend their unemployment benefits.

GOP House Speaker Kurt Daudt announced Tuesday that his caucus would not support Gov. Mark Dayton’s call for a special session to aid miners displaced by a global glut of steel.

There had been a flurry of negotiations over the past several weeks, usually stymied by GOP reluctance to call the special session. Republicans did float a concept for a more narrowly focused special session last week, but apparently that fell apart.

The issue of extending unemployment for miners is complicated. Unlike a permanent mine closure, the mines in question will probably re-open at some point. We just don’t know when. However, we also don’t know how stable employment at these and other mines will be over the next few years.

Point is, it’s not so simple as jobs going away. It’s a slow, probably decade-long winnowing of the workforce for a industry that will need at least some workers nonetheless.

Cliffs Natural Resources says that mines at Northshore and United Taconite Eveleth will likely reopen sometime after March. Cliffs is closing the Empire in Michigan, which will leave pellet orders to fill.

There’s a lot happening with Cliffs. On the positive side, the company claims the ability to make a “direct reduced grade” pellet at Northshore, the kind of pellets used to make the iron concentrate that feeds newer electric arc steel furnaces. They also plan something they call a “mustang pellet” at United Taconite, another specialized product for certain furnaces.

Further it appears that Cliffs has won its duel with Essar Steel. The new partially complete Essar taconite plant near Nashwauk appears stalled. Essar’s Algoma Steel mill in Sault Ste. Marie, Ontario, is moving through bankruptcy and shedding its pensions.

But these endeavors are hindered by Cliffs’ massive debt and the general unprofitability of commodities and steelmaking right now. Cliffs claims progress in unloading its debt. Yet I’ve had conversations with people who’ve been to these idled mines indicating that progress on new technology is slow. Famously, the mines can start or stop activity with a flourish at any time, but you have to watch what they do, not what they say.

Meanwhile, you have U.S. Steel, the granddaddy company of the Mesabi Iron Range. Last year, the company lost $1.5 billion. U.S. Steel’s Keewatin Taconite remains idled indefinitely. However, the company was the first to strike a contract agreement with the Steelworkers union this winter. That deal was just ratified by the workers.

Miners seem pretty confident about the prospects for U.S. Steel’s Minntac, the state’s largest mine, heading into the new year. But the smaller KeeTac might not open this year, and there are many worries it could be worse than that. One worker told me that there is hope that some of the KeeTac workers could get on at Minntac if there is a swath of new retirements after the new contract (and new retirement incentives) takes effect. It’s really hard to see good news coming for KeeTac in the near term.

All of this will start happening quickly. The real question — and I don’t know if anyone really knows the answer yet — is what happens around the Range come summer? Will taconite orders pick up? Or will we see intermittent shutdowns like we did last summer?

What will the mines’ political “ask” be at the legislature this year? I would not be surprised to see them go for everything and the kitchen sink — production tax cuts, fewer environmental regulations, cuts to just about anything that costs them a penny. The mines will argue that the increased margins will help them run, but of course the outcome will be more costs and less income for the state and nearby communities.

Meanwhile, several hundred miners will probably stay in some form of unemployment in 2016. They’ll have the option to go back for retraining, and I expect many will.

At some point, this region, its leaders, workers and their families, will have to figure out how to create stability in an unstable situation. We’ll have only a little help from the federal government, a little more but not much help from the state. The markets, if you didn’t notice, don’t care about us at all.

So a lack of a special session is a specific blow to specific Iron Range families, but we’re all loaded into the car for an even bumpier ride that will eventually include everyone who lives here.

Like it or not, we’re all in this together.


  1. Essar “shedding its pension?”

    “In a blow to Essar Steel Algoma retirees, a Toronto judge [ Justice Frank Newbould of the Ontario Superior Court] has authorized the struggling steelmaker to stop paying $3.38 million it owes each month to pension plans for its hourly and salaried employees.”


    “Last month, Justice Newbould approved $3.47 million in bonuses to 23 Essar Steel Algoma executives to ensure they stay with the company during its current restructuring under the Companies’ Creditors Arrangement Act, ordering that the names of the executives be kept secret in a sealed court file.”

    • Independant says

      Not a fan of how this company appears to be run but they are not shedding any pensions. When I look into the story the judge has allowed pension fund special over payments to stop temporarily but the normal monthly pension fund payments are still being made every month. The $3.38 million per month were special over payments to “refill” the underfunded pension plans. Not saying any of it is right or wrong but some major details are being left out of the statement. The one time $3.47 bonuses split among 23 execs ( which would average to about $151,000 each) is to help ensure they stay onboard and hopefully help facilitate a sale or investment by May 2016 which looks like the only possibility of a decent outcome for the pensioners and current workers.

  2. Yeah. Sorry, but you could use trained monkeys and a talking robot to “facilitate a sale or investment”. 23 execs at 151 grand per is called lining your pockets whole washing your hands of responsibility. Most execs are nothing more than lamprey.

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