Prairie River Minerals aims to restart scram mining on western Mesabi

Mine dumps like this one — hills of discarded iron ore and overburden — dot the landscape of the western Mesabi Iron Range. (PHOTO: MC Morgan, Flickr CC)

Amid high demand and temporarily limited global supply, another new scram mining venture aims to reclaim natural iron ore on the western Mesabi Iron Range.

Prairie River Minerals seeks to mine about 1.3 million tons of iron ore annually, mostly in Itasca County, hiring about 125 union workers in the process.

The chief partners in Prairie River Minerals include William Shaughnessy, acting CEO, longtime mining project manager Ed Shaughnessy, South African mining engineer and metallurgist Johann Grobler, retired U.S. Steel Minntac general manager Jim Swearingen, retired U.S. Steel manager Scott Conley and former State Rep. Tom Anzelc, who represented the western Mesabi Range in the legislature for ten years.

Anzelc, one of the partners, acts as head of government and media relations for the company. He spoke to me about the company’s plans Tuesday night.*

The company wants to process existing piles of natural iron ore, called hematite (from Latin, “bloodstone”). Companies abandoned these piles more than 50 years ago at locations near Taconite, Calumet, Nashwauk, Keewatin and Kelly Lake. This was the rich, soft ore that turned Northern Minnesota into a booming mining region 125 years ago.

New players, similar tune

If that all sounds familiar, you’re right.

Magnetation mined some of these areas five years ago with its patented magnetic separation process. That company went bankrupt in 2016. Tom Clarke’s ERP Iron Ore acquired those properties in 2017, but that company fizzled out last year.

In fact, Prairie River Minerals is a bidder on several of the former Magnetation assets, including Keewatin’s Plant 1, Taconite’s Plant 2, along with Plant 4 and the Jessie load-out facility near Coleraine.

Anzelc said the creditors in the bankruptcy, mostly contractors jilted by Magnetation or ERP in the past, have not accepted Prairie River Minerals’ offer. Thus, the trustee in the bankruptcy case holds Prairie River’s bid for Plant 1 and the load out, and another bid for Plants 2 and 4 under advisement.

These bids include royalties that will pay out over time, requiring patience that the creditors have long since expended. The former Magnetation facilities hold value for their scrap metal, another option the creditors would likely consider for faster cash. That’s what’s happening to the ill-fated Magnetation processing plant in Reynolds, Indiana.

But Prairie River officials say they’re committed to the project even if they don’t acquire the former Magnetation properties. In fact, Anzelc told me they’re willing to build their own load-out station and lease different surface ore supplies if they lose the bid.

What’s different this time?

Prairie River Minerals touts several differences from the failed projects of the past.

First, they will use a different process: ultra dense media separation. This isn’t new technology so much as a refined version of what scram miners like Rhude and Fryberger used decades ago. Grobler specializes in this extraction technique, which is widely used in South Africa.

“Magnetation sought to reclaim iron from tailings,” said Anzelc. “We are seeking to reclaim iron from lean ore stockpiles. … This is previously mined ore, from previously disturbed and discarded hematite. This material had marketable value prior to the passage of the Taconite Amendment in 1964, which ended hematite mining on the western Mesabi.”

These mid-20th Century hematite stockpiles could no longer be sold to steel mills after those mills converted their furnaces to run on taconite pellets. But now, decades later, some mills use processed versions of that same ore.

Prairie River’s equipment would be assembled on site. This requires less permanent infrastructure and road shipping. It also allows lower cost of production.

“Customers are interested in what we can provide and the price at which we can provide it,” said Anzelc.

The company holds letters of intent from two potential customers. Anzelc said neither company currently buys Iron Range taconite pellets. Therefore the ore sales won’t compete with existing mines.

Further, Prairie River signed a neutrality agreement with the International Union of Operating Engineers, Local 49. This means the workers at the plant would keep the option of unionizing.

What is this stuff?

The product the company want to ship won’t be iron concentrate or pellets. Rather, trains would haul out lump ores and sinter fines.

Lump ore consists of small chunks of iron — about 65 percent pure, low in silica — that can be used in blast furnaces to make steel.

Fines are iron dust that requires sintering, a more energy intensive (and less environmentally friendly) process, but that is still used for some furnaces.

“Lump ore and sinter fines are part of the recipe in making steel,” said Anzelc. “Collapse of the South American ore operations in Brazil [due to the disastrous Brumadinho dam failure] opens up a portion of the market that Prairie River Minerals is trying to capture.”

What’s next?

Prairie River faces several immediate challenges. For one thing, it stares down a tight timeline for getting its products to a hungry, but historically fickle iron ore market. Good markets don’t last forever, which is why Magnetation went under in 2016.

Resolving the fate of the Magnetation plants remains a piece of the puzzle. But there’s more.

“One hurdle we’ve yet to surmount is that we require a third party, neutral major metallurgical sampling of the material,” said Anzelc. “We have conducted sampling that indicates that such a large scale sample will prove the ore quality.”

They’re currently asking the Minnesota Department of Iron Range Resources and Rehabilitation to help fund the third party study. Three firms — Hibbing’s Lerch Brothers, Midland Research, and the Natural Resources Research Institute (NRRI) — would conduct different parts of the research. Eighty side-dumper loads of raw material from different locations need to be analyzed.

Businesses, officials and citizens on the western Mesabi have heard proposals like this before. So, some healthy skepticism seems merited. But Prairie River Minerals is backed by experienced hands in the iron ore business. The project seems closer to fruition than ERP Iron Ore was two years ago.

# # #

* DISCLOSURE: Tom Anzelc is a personal friend. I was his campaign manager during his career in the Minnesota legislature. I was previously aware of his work with this company, but have no role in it. He offered to share the story on the record and I judged it to be newsworthy.

UPDATE: This post was edited to correct errors in the information I was provided.


  1. Bob Brandt says

    I hope that this project pans out for Prairie River, as their approach appears to be a great way to reclaim value from a readily accessible resource and clean up these dumps at the same time. Thank you for writing about it.

  2. John Patterson says

    You sumed up exactly how this venture will be looked upon in a couple of years “Prairie River faces several immediate challenges. For one thing, it stares down a tight timeline for getting its products to a hungry, but historically fickle iron ore market. Good markets don’t last forever, which is why Magnetation went under in 2016.” Those challenges have persisted throughout mining history. Ultimately the residents of Minnesota will be left with the burden of cleaning up the mess and those mining employees will be left with shattered lives.

  3. Good to hear…I wish them well, capitalism and Iron Range spirited ingenuity at it’s best! The only downside is hearing public money (IRRRB) is involved. I don’t blame Prairie River Minerals for tapping into them, it’s free money. But the IRRRB has a lousy business track record. They’re terrible, politically motivated, “buying votes” politicians.

    However, using IRRRB worked out nicely for Tom Micheletti and Julie Jorgensen personally…without generating a milliwatt of energy. Not bad…

    Anzelc summed key to their success: “Customers are interested in what we can provide and the price at which we can provide it,” said Anzelc.

    • And on and on it goes-April 17, 2019

      “One of my goals has always been to depoliticize the agency,” said Layman during a recent interview with the Timberjay. “It has a highly partisan reputation in St. Paul.”

      Which is why Layman says she is so frustrated with the agency’s recent hiring of Joe Radinovich, the unsuccessful 2018 DFL candidate for the U.S. House in Minnesota’s Eighth District. Radinovich was hired in early March to a highly-paid, permanent position that IRRR officials appear to have created specifically for him.

  4. The devil will be in the details for this, and there are a lot of details to work out.

    The heavy media process for iron ore was more or less invented by Butler Brothers in Nashwauk in the late 30’s. Other than improved control methods and refined machinery designs it hasn’t changed much over the years.

    In the past with ferrosilicon the ancient ones in the heavy media plants here could get to a specific gravity of about 3.3 or so, but most of the old heavy media plants ran at about 3.1 for coarse concentrate. Higher gravity makes higher quality concentrate but leaves more iron behind in the tails. It’s a balancing act. Some ores just couldn’t be concentrated economically.

    For fine concentrate (sinter feed) the gravity was lower, built with magnetite (taconite concentrate). This grzvity was effectively increased in the heavy media cyclones that were used.

    Both produced concentrate around 9 to 12% silica and both were benign in terms of concentrate contamination and tailings contamination. I doubt there’s much of a market for concentrate like that today.

    To get a lower silica concentrate two things will have to be done, the rock will have to be crushed finer than it used to be and the separation gravity will have to be pushed.

    Magnetation was repeatedly denied permits for crushing plants because of haze generation from the dust. I don’t imagine this has changed. To build a much higher gravity something besides ferrosilicon will have to be used, which could create contamination problems. There also tends to be higher phosphorous in the stockpiled ores.

    If there was some new magic heavy media process the coal processors here and the iron mines that use heavy media in South Africa and Australia would be all over it, and I don’t read of that happening. I look forward to hearing and seeing the details of their proposal as this develops.

    I wish them good fortune, but please make sure their process is sound before putting public money into it.

    Yes, I am one of the last of the ancient ones who worked as a metallurgist in the old washing plants just after I got out of college.

    • “B” I’m sure Prairie River Minerals South African Metallurgist “that’s
      all over this “, would love to hear you past experience
      with DMS technology and discuss how the UHDMS technology he developed in South Africa will work here.
      Please contact him though Tom Anzelc.

    • Hearing your technical detail/knowledge along with opinion is appreciated B..thanks!

      Having worked in both a traditional washing/concentration plant, the Danube, and at Butler Tac when it first opened, these details bring back fond memories.

      I didn’t realize Magnetation had applied for crushers and was denied due to “haze?”. Makes one long for the good ole days when mines ruled the roost, built people housing, fist class schools, hired top notch teachers, paid workers more than they were worth…and townsfolk were more than willing to live with the red haze that covered the land, including clothes hung outside on the line to dry.

      The mines provided for generations of families to stay in the area, live a great life or for kids to go on to college come back or move on if they so chose. No wonder films like A Wonderful Life were produced during this time. It was.

    • Range Economic Historian says

      You sound like a very knowledgeable metallurgist ranger47 please stay close to the science of this project for us and the financial safety of the public. Clearly you have some real history of these past failed projects and have seen the public money disappear.
      My first thought is what skin in the game do the promoters of this project personally have or is this just a money grab because we can politically? In short is there any company principles money at risk or just more of my neighbors home equity?

  5. On thing separates Rhude and Freyberger (and Pacific Isle, Pittsburg Pacific, Moore, Skubic, and many more scram miners back in the day) from Magnetation is that they were in a financial position to weather downturns in the market by just shutting down and waiting. Even the Hannas, Cleveland Cliffs, Pickands Mathers and USS’s of the times did this.

  6. steve baker says

    The last scramming operation I recall was by Bruce & Dana Skubic at an old pit north of Virginia around 1990. Our engineering company provided surveying services and scale operators. The project lasted a couple seasons and provided good summer jobs for several area college students.

    • Jimmy Saranpaa says

      I think Skubics were involved in scramming the former Oliver pit, the Auburn Mine, in Virginia about 1994-95. Before Eveleth Taconite began expanding their Thunderbird North pit.

    • Anthony Skubic says

      Hi Steve – Anthony Skubic here. I shot you a friend request on Facebook, I would love to hear more about the work you did with my dad, Bruce, back in the day. As far as I know the project was successful for quite some time.

  7. Anne Amato says

    Worked 42 years in the Iron Mining Supply industry (including with Magnetation). Nine of the last 11 as the Mining & Industrial Division Purchasing Manager. But…I am also old enough to remember the “orange haze” that permeated everything in the Coleraine-Bovey areas and beyond. It is not just a “haze”….the return of this would be a return to an environmental catastrophe…especially considering the health risks now known, and the effects on property and the environment. Is this project (which would be “market-driven temporary” really worth it for 125 temporary jobs? Consider the effects of this first please…and….without truly effective “haze” reducing equipment, I would have to say a big “No” to this project. Itasca Country does not need any more issues.

  8. Anne Amato says

    Sorry for previous typo…meant to say “Itasca County” and its residents.
    But…further to previous–the following should also be seriously considered. The Mesaba Iron Range is one of the largest producers of iron for steel today…and one of the few remaining in the continental USA. During WWII, at the Hull-Rust-Mahoning Pit, it was said that men working 24/7 with equipment we would today consider primitive, provided the iron ore for 75% of the steel used in the entire Allied war effort–including the Lend Lease Program. From that time…to the 1960’s, our “easily accessible, high grade” iron ore supply was decimated.
    This is why we now rely on iron production in the form of Taconite Production.
    Many studies done world wide, indicate that sometime in the future, all iron producers will have to depend upon a form of separation–whether it is similar to our taconite production method, or perhaps a chemical process.
    Since the USA is largely iron-indepennt at this current time….what will happen if there is an officially declared national emergency and a need for steel? Will we still then be iron-independent and able to meet our needs?
    I doubt I will be around to see this happen…but if it does occur, this country will need all our natural resources as a matter of national security at that time. Perhaps it is time to consider conservation in some areas instead of “temporary market dollars”.

    • Jimmy Saranpaa says

      My heart goes out to Tom Anzelc. I wish him well on this venture. I felt all along when Larry Lehtinen began reclaiming old tailings ponds from wash plants and the formerly called “lean ore” dumps that this was wonderful. There is a lot of iron units to be reclaimed. I’m not so sure Jim Swearingen is a good choice to be involved in this project. I watched his performance as GM at Minnesota Ore Operations and found him to approachable by his employees. Not a good way to start out a new venture.

      Good luck, Tom. nFrom your old friend Jimmy Saranpaa

Speak Your Mind


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