Blast, at last: Minnesota’s first new iron ore mine in 50 years targets new era of steelmaking
Go Deeper.
Create an account or log in to save stories.
Like this?
Thanks for liking this story! We have added it to a list of your favorite stories.
After nearly two decades of starts and stops, bankruptcy and controversy, mineworkers are finally blasting iron ore from deep underground at the first new taconite mine in Minnesota in half a century.
Last week, local leaders and mine company executives hobnobbed with Trump administration officials who came to the Iron Range to witness one of the first blasts at Mesabi Metallics, a massive new $2.5 billion iron ore mine and processing plant in the final stages of construction outside the tiny town of Nashwauk.
Workers placed over a million pounds of explosives deep in a crater-like mine pit. After a countdown, a series of detonations sent plumes of rock and dust, colored red, white and blue for the occasion, spewing into the air.
The ground shook like an earthquake as the blasts dislodged an estimated 1.3 million tons of rich iron ore, which will then be scooped with giant shovels into trucks the size of two-story houses. From there, the ore will be hauled to a series of mammoth new buildings to be crushed, concentrated and fired in ultra-hot kilns, where it will be molded into specialized taconite pellets.
Turn Up Your Support
MPR News helps you turn down the noise and build shared understanding. Turn up your support for this public resource and keep trusted journalism accessible to all.
Those pellets, in turn, will be shipped around the country and the world, where they will help provide the feedstock for a new generation of cleaner, more efficient steel mills.
"Today is a very, very big day for the Iron Range, for the state of Minnesota and for this country,” Mesabi Metallics President and CEO Joe Broking told those on hand for the mine blast.
"We've experienced a lot of contraction on the Iron Range in Minnesota, and today we bring back the industrial might of the Iron Range to produce the Patriot Pellet," Broking added.
The mine’s opening comes at a critical time in northeast Minnesota, which is still reeling from closures last year at two of the region’s six taconite facilities: Minorca in Virginia and Hibbing Taconite.
“We have 600 people [who are] going on 17 months without permanent jobs,” said John Arbogast, a United Steelworkers Union district representative based in Eveleth. “So it is a big deal, and it's perfect timing for us.”
Many of those laid-off workers have already left the region, including some who moved to Arizona to work at mines there. But Arbogast said others recently found jobs at Mesabi, which has hired more than 200 workers thus far out of a planned 350 full-time employees.
About 1,500 construction workers are still on site, scrambling to finish the remaining work and have the mine’s new pellet plant open by October, when Broking said Mesabi Metallics would start production.
Broking said Essar, the Indian conglomerate that owns Mesabi and the mine and had filed for bankruptcy a decade ago, is funding the project. But the Export-Import Bank, a U.S. government agency, has also awarded Mesabi a $770 million loan, said President John Jovanovich.
"This is not just a rebirth of a new part of the Iron Range,” he said. “It's really bringing it into the 21st century.”
‘Huge shot in the arm’
Mesabi Metallics is being built at the former site of Butler Taconite, which closed during a major economic downturn in the 1980s.
"Every taconite plant up here was shut down,” recalled Nashwauk Mayor Greg Heyblom. “It just ravaged the Range."
Many workers and their families left for jobs in the Twin Cities and beyond.
“It was a mass exodus out of here,” said Barb Kalmi, Vice President of the Nashwauk-Keewatin School Board. “Our school enrollment dropped dramatically. Church pews emptied out.”
Mike Anderson was superintendent of Butler Taconite when it closed in 1985. He was one of the last people to leave the mine. Now 75 and retired, he returned to witness firsthand mining's return to the site, where millions of tons of high-grade iron ore still sits underground.
“It's going to be a huge, huge shot in the arm for this whole area,” Anderson said.
Al Guddeck stood by Anderson’s side, kicking the red, dusty soil with his boot. He worked at Butler Taconite for 20 years before it closed.
When he was growing up, he remembers his Grandma hanging laundry on a clothesline perpetually stained red.
“The first thing she did is she went out and wiped the ore off the clothesline,” said Guddeck, now 80. “She never complained about it because Grandpa was working in the mines, so it was money.”
Now, local officials say Mesabi Metallics is poised to deliver a badly-needed economic jolt to the region.
The mine’s projected to produce about 7 million tons of ore pellets annually, and it is expected to generate tens of millions of dollars in tax revenue for schools and local communities, in addition to six-figure salaries that are among the highest-paying in the region.
It marks a major turnaround for Essar, which declared bankruptcy 10 years ago with the mine half-built. The company owed tens of million dollars to the state and several contractors. Minnesota officials yanked state mineral leases and gave them to rival miner Cleveland-Cliffs. Gov. Tim Walz even tried to ban Essar from the state.
But despite all those setbacks, Essar restarted construction at the mine site in earnest a few years ago and now is on the cusp of finishing the massive project. The company has repaid the state nearly $50 million, and has made another $47 million in tax, lease and rent payments. Local leaders like Heyblom say the company has worked hard to rebuild trust.
"A lot of those naysayers, I see them now, and now they're supporters," Heyblom said.
Next-generation steel
There’s additional excitement surrounding the Mesabi Metallics project because the mine will produce what are known as “DR” pellets, which can be used to create a high-grade iron product called “Direct Reduced Iron” that can feed smaller, more nimble electric arc furnaces, which now produce 70 percent of steel made in the U.S.
Two other Minnesota mines recently upgraded to produce DR pellets: Northshore Mining in Babbitt and Silver Bay, owned by Cleveland-Cliffs, and U.S. Steel’s Keewatin Taconite mine.
Mesabi initially plans to ship its pellets to customers around the country. But it has bigger ambitions. It's also planning another $5 billion dollar investment to build a new facility to make its own DRI product.
"We're preparing to launch one of the biggest investments in the history of this country in iron ore and DRI,” Broking told the Itasca County Board at a meeting just days before the mine blast.
Broking said Mesabi intends to submit permit applications for the new plant to the state by the end of the year. But it's also considering building outside Minnesota. The company currently has about 20 jobs posted for a proposed DRI and steel plant in Paducah, Ky.
Broking told MPR News that Mesabi is exploring several locations for possible "downstream facilities," including on the Iron Range.
But he told the Itasca County Board that in order for Mesabi to make such a large investment in Minnesota, the company needs a faster state-level environmental permitting process.
“For an investment where we're going to decarbonize the steel industry, where everything that we're doing is about sustainability, there must be a way to get things like this done efficiently,” Broking said.
In addition, Broking said the company needs more competitive state incentives, and the return of mineral leases that Minnesota stripped from Essar after it failed to meet contractual agreements.
The state subsequently awarded those leases to Cliffs, which has argued it needs the leases to extend the life of Hibbing Taconite. But Cliffs has not moved forward with plans to mine the site.
Without those additional leases, Mesabi Metallics has an estimated mine life of 23 years, Broking said. Mesabi has requested that Minnesota cancel Cliffs’ leases, something the state could do with the approval of the state’s executive council.
Meanwhile Mesabi Metallics has filed an antitrust lawsuit against its competitor, accusing Cliffs of using anticompetitive behavior to block the development of its mine.
Mesabi is seeking more than $5 billion in damages in the case, which is scheduled to go to a jury trial next May.
