As Range mine’s ore runs low, election year drama runs high
Hibbing Taconite mine overlook at the old tourist center. Photo by Aaron Brown/Minnesota Reformer.
Hibbing Taconite is either going to close in early 2024 or stay open for decades.
It depends on who’s telling the truth — and the role politics played in a botched story about 740 jobs being lost as Minnesota’s second largest mine runs out of iron ore.
It all begins midday Thursday with this breaking news tweet by WDIO’s longtime Iron Range reporter Renee Passal.
Breaking: With no signal from the state about Nashwauk leases, Hibtac will be in an accelerated closure plan. Union says that means they could be closed by end of 2024. WARN notices about layoffs to be coming out in January. Over 700 people work there. #mining
— Renee Passal (@ReneePassal) October 27, 2022
The United Steelworkers union local supplied Passal with the tip. The implications were stunning.
For one thing, Hibbing Taconite is descended from some of the most important iron mines in North America. More than three-fourths of America’s World War II steel production came from ore mined in this pit. Losing this mine would be massively symbolic to a region that never fully recovered from steady job losses that began in the 1980s.
But more immediately, this was just 12 days before Election Day, during a campaign in which Republicans claim they might sweep the Iron Range. DFL legislative incumbents, long allied with the Steelworkers, learned via tweet that their efforts to keep Hibtac open had failed.
Apparently, however, they hadn’t.
Soon after the WDIO story went live, rival local TV news station Northern News Now reported the same. But Hibtac’s majority owner, Cleveland Cliffs, quickly responded that the story wasn’t true.
CEO Lourenco Goncalves told WDIO that he’s working with Gov. Tim Walz, the Minnesota Department of Natural Resources and local lawmakers to gain access to the Nashwauk ore and keep Hibtac open “for decades to come.”
Here we see a truly Bizarro World scenario: With emotions running high, a consequential election approaching, traditional roles flipped, the Steelworkers drop a message timed to put political pressure on Democrats while a mining company CEO comes to bail them out.
Was this a mistake, some complicated strategy, or just the result of hot tempers as job insecurity besets a workforce and region? Regardless, it’s a sign of the uncertainty that comes with the Range’s political realignment.
The fact that “Nashwauk leases” was in the first sentence of the breaking news tweet above was no accident.
It was a poorly guarded rumor among Steelworkers that Cliffs might announce Hibtac’s closure amid the waning days of the 2022 midterm election campaign. This would be an effective way to raise the temperature surrounding stalled state mining leases near the former Butler Taconite plant near Nashwauk.
This fall, an appeals court upheld the state’s motion to cancel the mineral leases that had been granted to the failed mine developer Mesabi Metallics for its half-complete skeleton of an iron ore processing facility outside Nashwauk.
For the uninitiated, more than half billion dollars’ worth of steel and equipment — along with millions in state-funded infrastructure — lie rusting in the scrub brush after the failed former Essar Steel project. That project was to usher in a golden age of value-added iron production on the Mesabi. Instead, it became a high-profile embarrassment for all involved. The reorganized Mesabi Metallics held the leases these last several years, hoping to restart construction. Now, only the Minnesota Supreme Court can save them, and that seems unlikely.
That’s good news for workers at Hibbing Taconite. The ore at Nashwauk could be conveyed to Hibbing to keep the plant open.
As tempting as it is to make this a story about Democrats and Republicans, what we’re actually witnessing is competition between America’s two largest steel companies — Cleveland Cliffs and U.S. Steel — over supremacy in the rapidly expanding direct-reduced (or DR) iron ore market. Cliffs isn’t the only party seeking the leases; U.S. Steel wants them, too.
For years, Cliffs has been using its vulnerable property at Hibbing Taconite as a lever to elevate its odds of getting the Nashwauk leases.
Meantime, U.S. Steel launched an expensive public relations campaign across the Iron Range this fall, touting career opportunities and the donation of land for a new Nashwauk-Keewatin High School. People on the Range already know U.S. Steel, so the bigger question is what are they after?
If Cliffs gets the leases, it gets the ore it needs to keep Hibbing Taconite open and expand its DR-grade pellet production for its plant at Toledo, Ohio.
If U.S. Steel gets the Nashwauk leases, it would suddenly control the western Mesabi with its new DR-grade pellet plant at Keewatin. Much of the region’s best DR-grade iron ore is on the western Mesabi at mines that were abandoned decades ago. The Nashwauk leases are critical to that supply.
What does all this drama really mean? We might not know until the heat of the 2022 election cools off.
But it will get hotter first. This Saturday at 10 a.m., Hibbing Steelworkers had already planned a “Save Our Jobs” rally in Chisholm. That event takes on new meaning as people try to sort truth from fiction during a period of high-stakes economic transition on the Iron Range.
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