A $440 million, 800,000-square-foot engineered wood factory is planned for Cohasset.

Charlotte, North Carolina-based Huber Engineered Woods said it will open an oriented strand board, or OSB, plant on 400 acres beside U.S. Highway 2 and state Highway 6, next to Minnesota Power's Boswell Energy Center. The plant is expected to employ 158 people and would be used to make the company's line of Zip System sheathing, Advantech subflooring and other engineered wood products.

(Gary Meader / gmeader@duluthnews.com)
(Gary Meader / gmeader@duluthnews.com)

The project plans were revealed publicly Monday during a meeting of the Department of Iron Range Resources and Rehabilitation's advisory board, which unanimously voted to support a $15 million forgivable loan for the project. The loan is forgivable if the facility employs 100 people over its first six years.

The project will also receive a $20 million loan from the Department of Employment and Economic Development and $27.5 million from "partner investor(s)." It's putting up the remaining $376 million in private financing.

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During the IRRR meeting held over video conference, Brian Carlson, president of Huber Engineered Woods, said Cohasset became the frontrunner for its sixth mill after looking at sites across the western United States and Canada.

"(We) ultimately decided that northern Minnesota — given the fiber basket that exists there, the long history of the OSB industry and the quality of the workforce — was an ideal fit for us," Carlson said, adding that it would boost the company's capacity by 30%.

Groundbreaking on the mill could come as soon as this fall but is mostly likely slated for the spring, Carlson said.

Scott Dane, executive director of the Associated Contract Loggers and Truckers of Minnesota, said the new plant is coming at the right time. Last year, his group convened an emergency meeting after Verso's Duluth paper mill announced it would close and the Sappi paper mill in Cloquet and Blandin mill in Grand Rapids slowed production and temporarily idled, respectively.

"A year later, because (of) the private and public efforts of all the people on this call, we're announcing the biggest development of the forest products industry in 40 years," Dane said.

Verso took mainly spruce and balsam from area loggers, and its closure meant demand for those species plummeted.

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Asked by Rep. Rob Ecklund, DFL-International Falls, if Huber would take those softwood species, Carlson said it would rely mainly on aspen, a hardwood.

"(Softwood is) problematic in OSB manufacturing," Carlson said. "Although we will be looking to incorporate small amounts into the process."

Carlson said the company expects to use 800,000 to 1 million tons of new timber each year, taken from a 70- to 100-mile radius from the plant.

Though converting tonnage of timber to cords can depend on moisture content, Sen. Tom Bakk, I-Cook, estimated the plant would take about 400,000-500,000 cords each year.

The plant will also mark the return of the manufactured wood industry to the area. While the area has paper plants, Northeastern Minnesota was also once home to a number of now-shuttered wood product plants, including Georgia-Pacific's hardboard plant in Duluth and Potlach's waferboard plants in Grand Rapids, Cook and Bemidji.

Matt Sjobberg, IRRR's executive director of development, said the area near Boswell would also help the area absorb the impact of Minnesota Power retiring one of its two remaining coal-fired units at Boswell in 2030 and then going "coal-free" by 2035.

Announcement of the plant was celebrated by officials from Itasca County, the city of Cohasset and Gov. Tim Walz's office as an economic diversification win for the region.

"This is a very big deal for northern Minnesota," Bakk said.

Walz's office cautioned that the project is contingent on additional financial assistance from state and local entities.

“It ended up in this (budget) negotiation and whether that was right or wrong, that’s where it’s at. We’ll get that thing through and make a difference,” Walz told reporters at the Capitol. “For the timber industry, this is one of the biggest things we’ve seen in decades.”

Forum News Service reporter Dana Ferguson contributed to this report.

This story was updated at 4:45 p.m. June 21 with additional information and a quote from Gov. Tim Walz. It was originally posted at 12:23 p.m. June 21.