Late last month, U.S. Steel announced a $150 million direct-reduced iron pellet production facility on the Mesabi Iron Range. The news made statewide television, radio and newspapers. Unions and elected officials lauded the development.
As well they should. This project will stabilize our local iron ore industry, still the largest source of economic activity in our region.
But make no mistake, U.S. Steel had to do this. In fact, the move was overdue. The global steel industry already swung heavily toward electric arc furnaces in smaller, more energy-efficient steel mills. These mills use pure iron and scrap steel, and provide a market for DRI pellets like these ones. Furthermore, U.S. Steel’s top domestic competitor, Cleveland-Cliffs, is already years ahead of them in producing this kind of product.
Thus, what this story really represents is the reality of change manifesting here on the Iron Range, where resistance to change sometimes seems to be our shared religion.
Our region is marked by the well-worn economic rut of resource extraction. As such, it’s easy to imagine prosperity as something with an on-off switch. That’s how it appeared to our parents and grandparents. Only when we consider research, development and economic trends do we see that we may choose less passive, more productive strategies.
In this, let’s look at one of the many ancestral homelands of modern Iron Rangers: Sweden.
A June 29 story by Per Liljas in the Washington Post details advances in steelmaking technology in northern Sweden. There, major projects aim to create “fossil free” steel. Considering that steel is part carbon, which usually comes from coal, that may seem outlandish at first.
These Swedish companies say they’ll not only use clean energy to power the machinery, but that they’re developing a chemical process to purify iron ore using hydrogen. According to the Liljas story, the process could cut 90 percent of the carbon from steelmaking, which is responsible for more than 7 percent of the world’s carbon emissions.
And for towns in northern Sweden, this investment means jobs. Current projects being developed in the far North include a new battery factory, iron mines and steel mills — all advertised as nearly free of fossil resources like oil and coal. Boosters say the green boom will create more than 100,000 new jobs for Norrbotten county, a rural region which holds roughly the combined population of Duluth and the Iron Range.
Why all this development? Sweden is requiring the reduction of carbon emissions in its economy while investing in viable solutions.
Now, Sweden is not one of the world’s largest steel producers. The United States produces far more steel, but is still only the fourth largest steelmaking nation.
Additionally, Sweden produces iron and steel at much higher cost than the world’s biggest producer: China. But here again, the United States is more similar to Sweden in this regard than it is to China. The U.S is following the path of another aging giant, the United Kingdom, where specialty steel production in northern England replaced vast steel mills years ago.
The U.S. steel industry is getting smaller and higher tech because it must. As such, our region’s mining industry is either part of that change or it will become a blink-on, blink-off resource colony, a couple thousand workers at best. The prospects in northern Sweden seem far preferable.
U.S. Steel’s DRI pellet facility is an important development, one that promises continued investment in iron production here on the Mesabi. But when this new facility is up and running, we will be at the starting line — not the finish.
Long term progress will require much bigger investments from mining and steel companies. Indeed, it will require more of the state and of us as individuals. We need to think beyond the blunt forces of today’s markets to imagine the world of the middle century and beyond.
Our ore resources will be strained by then; not exhausted, but less rich. If you can’t mine more, you have to mine smarter. There’s no way to do that without adopting a rich portfolio of efficient, value-added production. Removing carbon-based energy from the mix is not only good for the planet, it presents opportunity for our region.
Further, missing this opportunity dramatically shortens the life of our local mines. Resentment of efforts to reduce carbon emissions is misplaced. Climate change is demonstrably real and can be mitigated. The real enemy, as ever, remains the hard work involved in swiftly adapting to change and the temptation to do nothing even if it kills us.
Aaron J. Brown is an author and college instructor from northern Minnesota’s Iron Range. He writes the blog MinnesotaBrown.com and co-hosts the podcast “Power in the Wilderness” on Northern Community Radio. This piece first appeared in the Sunday, July 17, 2022 edition of the Mesabi Tribune.
“These ones”??? Really?
An integrated steel mill needs 25 gigajoules of energy to produce one ton of steel, according to professor of energetics Vaclav Smil. Most of that energy is tied up in blast furnace operation. An electric arc furnace needs only 5 GJ to produce a ton. Back in the 70s, economist Lester Thurow noted that Europe and Japan rebuilt their destroyed steel industries after WW II with modern technology while the U.S. continued to use tired old open hearth furnaces, and that was not sustainable, that the U.S. would not be able to be competitive in steel production unless it invested in modernization.
All the major mines on the Range are owned by steel companies who are mainly focused on supplying their own mills and not producing pellets for the open market. While the Range was sleeping, Cleveland Cliffs mutated from a mining company into a steel producer with its purchase of Arcelor Mittal’s North American operations and also its purchase of the largest scrap steel company in the U.S. Cliffs is no longer interested in pushing pellets, and that means that its high cost Babbitt/Silver Bay operations will be relegated to swing production. The Babbitt mine will not go back to regular production after summer shut down.
I would not be surprised if U.S. Steel were to build an electric furnace mill at its old location in west Duluth and use Swedish technology. Or Cliffs could do that. Why ship pellets down the lakes if they can be converted to steel close to the mines and tap into abundant windpower electricity that Lake Superior has potential for? Duluth has an ocean port and four Class I railroads. It has the infrastructure. The Range has gotten accustomed to using a “sugar daddy” to solve its problems. It needs to get out of its one-track rut and start thinking creatively.
Mining is a one-time harvest. From the moment the first ton of ore is mined, the end is already in sight. The world is littered with abandoned mining towns on dead-end roads. The Iron Range lies within the boreal forest biome, one of the hardest places for humans to live and make a living. Just look at Siberia. Not many people there. Because of the iron mines, the Arrowhead is punching above its weight in population density. That’s not sustainable without economic development, where the real economic boost comes from value added, not basic commodity production. The two largest production industries here are mining and forestry, both of which have extremely high productivity requiring few workers, and that is why any new hard rock mines will have limited economic impact. Population decline is inevitable without value added development.
USS made four announcements in the last year but there should be a fifth to come to close the loop.
They snnounced a new electric furnace plant about hzlf way between Memphis and St Louis near their recently acquired Big River electric arc plant.
They announced a pig iron caster at Gary, presumably to provide high quality feed to Big River and the new mill. This caster will use hot metal from Gary’s blast furnaces.
They announced a granulated pig iron plant at Granite City IL near St Louis. This will use hot metal from Granite City’s blast furnaces, presumably to provide high quality feed to Big River and the new electric arc plant. This will mean the shutdown of the steelmaking side (basic oxygen furnaces, casters , rolling mills, etc.) at Granite City.
They announced modifications to one of their Minnesota plants, which one to be determined, to produce DRI grade pellets.
Neither of the pig iron facilities or the new electric arc plant require DRI grade pellets to make their products. USS must plan on either selling these pellets or building a yet to be announced DRI plant somewhere.This is the rest of the story.
There are three large operating DRI plants in the USA. One is owned by Cliffs in Toledo. The other two are owned by USS competitors with direct access to te Gulf of Mexico. Who would USS sell these pellets to?
Don’t plan on anything more than absolutely necessary being done in Minnesota. Our business.climate for these types of things is too poor.
Keetac in Keewatin is most likely place for DRI, since its ore is easier to get to DRI state. Meanwhile, on the Polymet front, mining in the Laurentian Shield, most of which is in Manitoba, Ontario and Quebec with its southern edge in Minnesota, has seen a steady decline in activity. Thompson and Flin Flon, Manitoba had their smelters shut down years ago, while Sudbury still has its smelter but has cut way back on activity. Minnesota hard rock ore would have to go there by rail, an expensive proposition. Meanwhile, the huge Panguna mine on the island of Bougainville is in the process of being reactivated. It has easily mineable high grade ore with copper concentration nearly three times as high as Minnesota’s, a twenty mile slurry pipeline to a deep water ocean port only 3,000 miles from the largest consumer of copper in the world, China. You’re right, the business climate for these types of things in Minnesota is poor.