In the Spotlight

News & Features
More from MPR
Your Voice
DocumentJoin the conversation with other MPR listeners in the News Forum.

DocumentE-mail this pageDocumentPrint this page
Iron Range is booming, but it's hard to find an optimist
Larger view
The open pit mines, run by United Taconite near Eveleth, resemble a moonscape. (MPR Photo/Bob Kelleher)
It's a banner year for Minnesota's iron mining industry, thanks to China's red hot economy. The demand from China is driving up the price of iron ore worldwide. In northeast Minnesota, you might think the good times are here. But it can be hard to find an optimist on the Iron Range. They've been down this road before.

Eveleth, Minn. — The grey open pit mines begin just at the edge of Eveleth. Here it's a monochrome moonscape, broken only by dusty yellow mining trucks and oversized tractors called shovels. Their drone rises from the pits 24 hours a day, every day.

But a year ago, the trucks and shovels fell silent. The mining company, Evtac, was bankrupt, the victim of a shrinking U.S. steel industry.

And yet, by December, the mines were back in business, now as United Taconite Company, which is owned partly by a Chinese steel company. It's producing iron pellets for the Chinese market.

Larger view
Image Joe Strlekar

Economist Tony Barrett says the boost in iron production across northeast Minnesota's Iron Range is all due to China.

"China has been instrumental to totally turning around the steel industry, and consequently the taconite industry," says Barrett. "It's as simple as that."

Barrett, with Duluth's College of St. Scholastica, monitors the state's taconite industry. Barrett says China, the world's largest country, is on a building binge that's driving up the price for iron and steel worldwide. China is building new housing for its growing middle class, new roads, and new facilities for the 2008 Oympics in Beijing.

"So there's a high level of built-in government spending that's going to take place, regardless of what's happening cyclically to the rest of their economy," Barrett says. "So, I think, for steel, you're looking at a fairly solid prospect for continued prosperity through the rest of this decade."

Prosperity is not a word often heard on the Iron Range. This region has lost some 12,000 mining jobs since the 1970s. Three years ago LTV Steel closed in Hoyt Lakes, taking 1,100 jobs out of the local economy. A year ago, it was hard to sell taconite. Now, China's driving the market.

Larger view
Image Pessimistic about the future

Joe Strlekar can be found in downtown Eveleth's United Steelworkers union local office. It's a two-room office, but often a one-man operation. In the morning, Strkelar is president of Local 6860. In the afternoon, he's mining. Strlekar says the China connection came as a complete surprise.

"If someone had told me a year, year and a half ago, that we would be shipping domestic -- or North American -- iron ore to China, I would have said they were nuts," Strlekar says. "It would never happen, just cost prohibitive."

It's happening. But Strlekar wonders for how long.

"I don't expect this Chinese market is going to last for a long time, for the iron ore industry especially, because I expect Australia and Brazil to ramp up their production," Strlekar says.

It can be hard to find an optimist in Eveleth. A block from the union hall is the United Steelworkers subdistrict office. This is where you'll find Jerry Fallos. Fallos used to head the steelworkers local at Hoyt Lakes, but the local vanished with LTV Steel.

"It's been a roller coaster of emotions over the last four or five years," says Fallos.

Larger view
Image "Good times are never here"

You'd think the roller coaster is on the rise. In Hoyt Lakes alone there are, on paper, at least three big projects that could create 1,000 jobs combined. There's a power plant proposed, and another mine for minerals like copper and nickel. Mesabi Nugget might build an iron nugget plant. But Fallos isn't convinced.

"I guess I'm kind of a pessimist," Fallos says. "From my point of view, what I've been through with the LTV closure, and all the hoopla about Mesabi Nugget and everything that's going to happen. I've been hearing about this for the last three years now, and nothing's happened yet."

And every roller coaster has its downhills. Fallos worries about the next plunge downward.

"What I'm afraid of is once China catches up with everything in a couple of years, we're going to be right back where we were two or three years ago, where the demand here isn't quite as high as it is right now," says Fallos.

Down about a block, Linda Welsh has seen it both ways. She's sales manager at Keenan's Television and Appliance. A year ago, with Evtac closed, she was selling mostly used appliances. Now there's a delivery of new refrigerators on the sidewalk out front. But don't tell Welsh the good times are here.

"The good times on the Iron Range are never here," Welsh says. "Our economy is so based on what's going on in the rest of the world. Yeah, you can have good times for a year or two, or maybe even 10, but you know that the hard times are going to hit again."

For taconite, China represents the latest boom. Rangers are sure a bust is somewhere down the road. On the Iron Range, you ride the booms and survive the busts.

Respond to this story
News Headlines
Related Subjects