Cliffs announces iron plant in Toledo

Cliffs Natural Resources will build a new iron briquette plant at this site located in the port of Toledo, Ohio. (PHOTO: Port of Toledo)

Last week, Cliffs Natural Resources announced it would invest $700 million in a new iron briquette plant in Toledo, Ohio. This will be the company’s first entrance into the electric arc furnace market. That means Cliffs will finally produce the value-added iron products modern steelmakers require. They will no longer be limited to varieties of taconite to feed old blast furnaces.

That itself is significant news for the largest American producer of iron ore, a major player here on the Mesabi Iron Range of Northern Minnesota.

Mesabi Range and Michigan iron ore will feed this new plant in Ohio, so on one hand not much will change. Nevertheless, some disappointment accompanies the news. Cliffs CEO Lourenco Goncalves had said he wanted to build the first direct-reduced iron plant here in Minnesota. He sought to acquire the former Essar Steel Minnesota site near Nashwauk in bankruptcy.

However, Cliffs’ bid for Essar was paltry compared to the successful proposal made by Tom Clarke and London-based GFG. This would indicate that Cliffs wanted a site, but wasn’t willing to pay much for it.

In truth, Cliffs started preparing this alternative plan a long time ago. It wanted the Essar site for a bargain. Goncalves complained about the various interests in Minnesota, but only total state and federal capitulation to a private company would have caused Cliffs to make its first iron nugget plant here. Think what you will of Cliffs, that shows that they see cost-based logistical advantages to putting iron production in the Rust Belt. It will take true vision to make it work here.

Will that vision come from Cliffs or the new owners of the Essar project, still searching for a name for their new version of an old venture? (Clarke indicated they’ve got some blowback for naming their holding company “Chippewa Capital Partners,” so another name is forthcoming).

That will be determined. This remains another lesson that the communities of Northern Minnesota control relatively little about these matters. That’s why economic self-determinism and diversification becomes so very important, even though it is hard.

Like Cliffs, we must prepare for market realities, not fiction. It’s good to dream of a strong economy, even one that includes mining. But we must be clear eyed about the costs and challenges, along with real employment over time. We must support innovation for future over short term thinking.


  1. Taylor Johnson says

    Interesting that this did not become a political issue like the Minnesota Power plant in Superior. The point Aaron brings up about the economics of the market makes me wonder if Chippewa capitol isn’t banking on a more friendly governor ifthey decide to not build a HBI plant. I’m very hopeful that the project is completed as promised, but we’ve heard similarly optimistic ideas about the project before.

  2. independant says

    There is a reason that companies are not building in Minnesota and it is not a simple logistics play. Minnesota is a horrible place for industry to do business. Inconsistent and ever changing rules and regulations create an environment no industry wants anything to do with. The company I work for is currently looking at moving into other states because industry expansions are happening, just not here.

    • Ranger47 says

      Amen…the mandatory $30 per hour minimum wage debate currently going on in Minneapolis is a great example of what you speak.

      • Taylor Johnson says

        Citation please. I have seen news of the fight for 15 but nothing other than that.

        • Ranger47 says

          $15, $22, $30 or $65…it makes no difference Taylor. Once the government sets an arbitrary and legally required amount I must pay someone that’s more than the value I receive in return, I’m looking to move out…or never move in. That’s what Independant is speaking of…along with the embedded “we/they” closed fist in your face union atmosphere throughout Minnesota.

  3. Taylor Johnson says

    But that’s already happened there is a minimum wage. The government has set a minimum wage for decades. Your party is totally in control of the federal legislature and executive branchs. Why not repeal the federal minimum wage and make any illegal. Let the free market sort it out.

    • Ranger47 says

      “my party” isn’t in control…And Trump is frying bigger fish, with greater positive impact for you and me, than picking fight with Minneapolis to eliminate the minimum wage.

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