The World Comes to the Iron Range

Another Range start-up is Mesabi Nugget, now co-owned by Indiana-based Steel Dynamics and Kobe Steel Group, which holds 19 percent of the project. Mesabi Nugget has acquired the necessary environmental permits to begin construction on its nugget plant located at the former LTV site near Hoyt Lakes, but has not yet received permits to begin mining the site. For now, the plant will use iron concentrate it buys from other mines to produce nuggets that are 97 percent metallic iron, which can be used in mini-mills.

If the company receives the necessary mining permits, it could eventually produce about 500,000 metric tons of high-grade iron per year, which will then be shipped to Steel Dynamics’ mini-mills in Indiana. Kobe Steel does not have ownership or distribution rights for any of the nuggets produced.

At Home on the Range?

For those working in the mines, the influx of foreign ownership has been positive so far. “I’ve seen a lot of ownership changes. The benefit of foreign ownership is it has kept the mines going,” says Tuomi, who has managed three mines in the past 12 years: LTV Steel, Hibbing Taconite, and now United Taconite. “There wasn’t a long list of people interested in buying and opening up the old Evtac mine. I think the employees of United Taconite appreciate the current ownership. They’ve seen significant investment in the mine.”

Since 2003, Cleveland-Cliffs and Laiwu have spent $110 million on capital improvements, and United’s taconite production has grown from 4.1 million long tons to 5.3 million long tons. “We resurrected an old mothballed furnace,” Tuomi says. “We pumped a lot of money into that, and put significant environmental improvements on it, and increased the production here by 800,000 tons as a result.”

Hibbing Taconite also has seen mostly positive changes. “The capital, or investments by the owners, has changed driven by the demand for ore,” Tomsich says. “They are making sure we have the equipment and personnel to provide that ore.”

But ArcelorMittal’s sheer size means that Hibbing Taconite now competes against other mines across the globe. “They take a look at the investments we are proposing and compare that to all of their other sites throughout the world,” Tomsich says. “They have a competitive basis on who gets what funding, and what purpose it would serve. Would it increase capacity? Would it reduce costs? They are trying to determine where is the best place for the investment.”