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Eveleth taconite plant closes
by Bob Kelleher, Minnesota Public Radio
May 14, 2003

EVTAC has made its last taconite pellets. EVTAC, known as The Eveleth Taconite Co., is shutting down, and 450 workers will be laid off by the weekend. Company officials hope to eventually reopen EVTAC's iron mine and taconite pellet plant. But many fear that may never happen.

Duluth, Minn. — EVTAC's shutdown has been billed as temporary. The company can't find buyers for its taconite pellets, but officials still hope they can find another customer and reopen. Joe Strlekar, president of the United Steelworkers Union Local 6860 in Eveleth, says EVTAC's mine has plenty of good ore and its pellet plant is well maintained.

"EVTAC's best hope is that we can still survive, and get some contracts in the future -- or new investors," says Strlekar. "But I'm not sure what form that might be -- if it will still be EVTAC, if it will be a new company down the line. But I'm still holding out hope for that."

Many say EVTAC may never reopen. The iron mining and taconite pellet operation has been considered at risk for at least 10 years.

About 20 miles away, LTV Steel Mining Company in Hoyt Lakes closed just over two years ago. That put more than 1,000 people out of work.

Strlekar says if EVTAC's layoffs become permanent, it will be a challenge for laid-off workers to find another job on the Iron Range.

EVTAC's best hope is that we can still survive, and get some contracts in the future -- or new investors. But I'm not sure what form that might be -- if it will still be EVTAC, if it will be a new company down the line. - Joe Strlekar, local union official

"Very difficult. It will be very difficult," he says. "As you know, these are the best jobs in the area. And, to replace these kinds of jobs will be a tremendous task."

EVTAC has been in business for 38 years. Many of its workers have been with the company for decades. More than 90 percent are over the age of 40. Strylekar says those workers face a hard decision -- whether to leave the Iron Range or stay and wait for an eventual reopening.

"Some of these people with anywhere between 25 to 30 years of service are kind of handcuffed to the place," Strlekar says. "If it does survive -- you know, they're within a few years of their pension. So, it's kind of tough to just pull up and leave without knowing for sure that it's down for the count."

EVTAC shuts down its taconite furnaces Thursday. Friday will be cleanup and Saturday the closing.

Experts say the company's taconite pellets can't compete with low-cost iron produced in other countries.

Economist Tony Barrett of the College of St. Scholastica in Duluth says a worldwide glut of steel and iron is causing weak pellet demand. The current economic downturn also cuts demand for steel-based products like appliances.

Barrett says EVTAC's bankruptcy and shutdown will have ramifications across the region.

"It affects the railroad companies. It affects the local economy severely," Barrett says. "I know that when LTV shut down, the Mesabi East school district lost at least a quarter of their funding because of the loss of property taxes."

The ripple effect of EVTAC's closing is already being felt. The Duluth Missabe and Iron Range Railway has told more than 80 workers they stand to lose their jobs. And EVTAC is a major electricity customer for Duluth-based Minnesota Power.

EVTAC's recent bankruptcy filing lists unpaid debts owed to 118 firms. Most are based in area communities like Hibbing, Virginia, Duluth and Superior.

EVTAC's closing leaves Minnesota with five taconite mining companies. U.S. Steel Corp. owns the largest, MinnTac in Mountain Iron. U.S. Steel is in the process of buying National Steel Pellet Co. in Keewatin. Economist Tony Barrett says National Steel Pellet would have to be considered the next most at risk.

"Now (that) U.S. Steel's bought them, we'll see how committed they are to the plant," Barrett says. "That's the one to keep an eye on, just because of the uncertainty with the new ownership."

At EVTAC, just four hourly workers will remain on the job to maintain its production plant and equipment. Another 29 salaried workers will remain to manage EVTAC's payroll and health plan, and to look for that elusive contract that could bring EVTAC's workforce back to the job.

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