Minnesota Steel cleared to begin construction of Nashwauk plant

ST. PAUL -- Minnesota Steel, the long-discussed taconite-to-steel operation planned for the Iron Range, crossed probably its final governmental hurdle Friday when a Minnesota Pollution Control Agency board unanimously approved an air permit.

ST. PAUL -- Minnesota Steel, the long-discussed taconite-to-steel operation planned for the Iron Range, crossed probably its final governmental hurdle Friday when a Minnesota Pollution Control Agency board unanimously approved an air permit.

Minnesota Steel President John Elmore said work on the Iron Range plant will begin soon, and an India-based company could begin closing its purchase of the operation within days.

The $1.6 billion construction project would be one of rural Minnesota's biggest economic development projects in years. The plant is scheduled to be completed in two years and would employ 700 workers, with up to 2,100 others working in supporting roles, Elmore said.

The pollution board's 8-0 vote was the last of many governmental approvals needed to build the plant, which has been discussed for more than two years. Although opponents have 30 days to appeal the Friday decision, no one has said they would do so.

Even opponents testifying during a five-hour hearing -- before the board voted with almost no discussion -- said they only oppose specific parts of the plan. Everyone who testified Friday said they support the Minnesota Steel proposal.


The company's plan is to begin mining the Range's most iron-rich taconite deposits and process the ore into steel on the site near Nashwauk. No other North American operation makes steel where ore is mined, and Elmore said he knows of no such operations in the world.

The Hibbing Chamber of Commerce leased a bus to bring nearly 50 business, government and labor representatives to the St. Paul hearing.

Costly project

At $1.6 billion, Minnesota's Steel's taconite, direct-reduced iron and steel slab facility would be Minnesota's most costly industrial project. By comparison, the new 40,000-seat Minnesota Twins stadium due to open in 2010 is estimated to cost $522 million.

The plant would be the largest construction project on Minnesota's Iron Range since taconite plants were built in the 1950s, 60s and 70s.

It would be built on 20,000 acres near the site of the former Butler Taconite plant west of Nashwauk.

Butler Taconite, which in 1964 produced its first iron ore pellets, was razed after closing in 1985 because of bankruptcy.

The facility would become the nation's first mine to produce taconite, direct-reduced iron and manufactured steel at a single site. The nation's first steel slab plant would be fueled by natural gas.


Steel slabs manufactured at the plant would be shipped to domestic steelmakers to be turned into steel for products for automobiles and appliances. All of the steel slabs currently used by domestic steelmakers are imported.

Construction of the plant would usher in a new era of mining development for the Iron Range and the nation.

"The U.S. imports slabs," said Peter Kakela, a Michigan State University taconite industry analyst. "And the Butler mine ore is excellent. It's not just the size and money of the project, it's a new concept to make slabs right at the mine. The production of straight taconite pellets is 40 to 50 years old and not much has changed. It's time for a new approach and to try something different."

Slabs produced at the plant would be about 8 to 10 inches thick, up to 6 feet, 8 inches wide and about 30 feet long. Minnesota Steel would produce about 1.6 million tons of steel slab annually.

The former Butler Taconite site contains an estimated 1.4 billion tons of iron ore reserves, viewed by industry experts as some of the highest-quality ore remaining on the Iron Range.

About 2,000 construction workers would be required to build the plant over two years.

Initially, the plant would employ about 400. Construction of a second slab-producing line would boost employment to about 700. Estimates are that the plant would create about 2,100 spin-off jobs and have an annual economic impact of $500 million.

other mining



After its initial construction plans for the plant were submitted to regulatory agencies, Minnesota Steel modified the plans to meet concerns of regulators, said Ann Foss, Minnesota Pollution Control Agency mining director.

The project is one of several major mining developments either under way or proposed on Minnesota's Iron Range.

An expansion of Northshore Mining Co. in Silver Bay was permitted and a new taconite pit for Mittal Steel USA's Minorca Mine has been approved.

Permits for development of the world's first iron nugget plant near Aurora also have been approved toward a 2009 start-up date.

Several companies seeking to construct base and precious metals mines in Northeastern Minnesota are in various stages of development.

Together, the projects would create thousands of new jobs, create new revenue for local and state government, stimulate spin-off business and jobs and help keep existing businesses viable.

"I'm happy to hear that the people at Minnesota Steel have been able to overcome hurdles in their permitting process," said Craig Pagel, president of the Iron Mining Association of Minnesota. "It shows that iron mining in Minnesota is still a viable, growing business that adds jobs to the people of Northeastern Minnesota and billions of dollars to the state economy."

Don Davis reports for Forum Communications' State Capitol Bureau. Bloomquist reports for the Duluth News Tribune, which is owned by Forum Communications.

What To Read Next
The system crashed earlier this month, grounding flights across the U.S.