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Feds will probe effect of steel dumping

A federal probe may hold the promise of relief for Minnesota and Michigan's beleaguered iron mining industry. Activists pushing the government inquiry are urging the public to get involved. In January, the U.S. Department of Commerce started an i...

A federal probe may hold the promise of relief for Minnesota and Michigan's beleaguered iron mining industry.
Activists pushing the government inquiry are urging the public to get involved.
In January, the U.S. Department of Commerce started an investigation to determine the effects of imported iron ore and semi-finished steel on national security.
Steel workers, company leaders and others with ties to taconite production have repeatedly warned that the cheap imports are destroying the industry.
The semi-finished products, such as slab steel, are used to replace taconite pellets. Each ton replaces about three tons of pellets.
Analysts say the problem peaked in 1998 but continues to devastate the United States steel industry. The reverberations in the Northland have meant lost jobs and an uncertain future for mining and related industries.
And as mining revenues decline, St. Louis County will lose taconite tax income.
There have been other efforts to spur federal involvement in the issue, but insiders feel this approach is the most promising.
Launched in the last hours of the Clinton administration, the investigation is on a timetable to provide findings and recommendations to President George W. Bush by late October. Its first deadline is April 9, which closes the period for public comment.
Earlier on, the Clinton administration backed off on trade sanctions to protect the steel industry, a move now being weighed by the new team in Washington. The national security investigation was requested by Minnesota Rep. Jim Oberstar and Michigan Congressman Bart Stupack.
In a letter to former Secretary of Commerce Norman Mineta, the congressmen pointed out that semi-finished steel imports reached a record high in 2000. As a result, domestic iron ore producers were being forced to reduce production. They cited the closing of LTV and cutbacks at other mines as some of the consequences.
Depending on the outcome of the investigation, the Bush administration could take action to assist the industry through trade measures, direct assistance or other means.
Stand Up For Iron Ore (SUFIO) and the Northeast Minnesota Development Association are trying to make people aware of how they can participate. SUFIO is a coalition of miners, managers, suppliers, community groups and political leaders concerned about the domestic iron and steel industry.
"It's a real burden on our industry," said SUFIO coordinator Mike Prusi. "Government involvement is the only solution."
He explained that imported steel was being dumped in this country below the cost of production. It's been a growing trend that has already decimated the domestic industry, despite increased efficiencies.
Nationally, 14 steel companies have filed for bankruptcy since the crisis began, idling about 33,221 workers. With prices and profits down, investors have abandoned the industry, which needs capital to modernize and remain competitive.
"If the trend continues, we're not going to have anything left," said John Ongaro, director of intergovernmental relations for St. Louis County. Look at the spill over impact, fewer steel jobs mean less jobs for vendors and related services.
In addition to the period for public input, there will also be hearings later this year.
Comments can pertain to the need for domestic steel production relating to national security or companion issues. These include: "the displacement of any domestic products causing substantial unemployment; decrease in revenues of government; loss of specialized skills and productive capacity; or other serious effects."
"April 9 is fast approaching," said Prusi. "We want to raise awareness."
SUFIO hopes to generate thousands of letters from people expressing their concerns. Letters must be sent in triplicate to: Brad Botwin, director, Strategic Analysis Division, Bureau of Export Administration, U.S. Dept. of Commerce, Room 3876, Washington, D.C. 20230.

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