After decades of mining, industry still unpredictable

By Kathleen Foody
Gannett Wisconsin Media
March 18, 2013

As he was sworn into the Minnesota House of Representatives in 2001, Tony Sertich’s thoughts were on the district he was newly elected to represent.

LTV Steel, one of the largest employers in northern Minnesota, closed the gates to its iron-processing plant in Hoyt Lakes that day and laid off about 1,400 employees. The company said the plant couldn’t produce taconite pellets cheaply enough.

“One day, these mining jobs are going to go away,” said Sertich, now commissioner of Minnesota’s Iron Range Resources and Rehabilitation Board. “Probably not in my lifetime, but they will.”

Even for Minnesota and Michigan, where active mines have operated for more than 100 years, the unpredictable global market determines whether times are good or bad for the employees and their neighbors. And it’s unclear what that reality will mean for a potential new player in Wisconsin, where Gov. Scott Walker signed a bill Monday aimed at encouraging construction of a mine in Iron and Ashland counties.

The fate of that project is still uncertain. Opponents including the Bad River Band of Lake Superior Chippewa plan to fight the law in court. Even if those efforts are unsuccessful, it could take years for state and federal officials to approve Gogebic Taconite’s permit applications.

In Minnesota, where officials have worked on iron mine permits for years, a new mine takes at least four years to reach the point of taking minerals out of the ground.

Modern mines are rooted in technology, which can mean fewer people are necessary to run the operation. It also requires workers to be better educated — a far cry from the recent high school graduates who used to flock to jobs at mines in Minnesota and Michigan.

“I think people look at iron mining as a low-tech industry,” said Dale Hemmila, spokesman for Cliffs Natural Resources. The company, based in Cleveland, operates three iron mines in Minnesota and two mines in Michigan with other operations in Canada and Australia.

“There is sophisticated processing within the plants; computer technology is in use in the mining area and in processing facilities,” Hemmila said. “Pretty much everybody who works in our facility, from a truck driver to an engineer, has some daily interaction with a computer interface.”

But worldwide demand, especially from China, for iron ore plays the biggest role in determining the number of people needed to blast and transport taconite from pits, crush and process it into pellets, and move the product to U.S. ports.

“Somebody will go out of business if China falls out,” said John Engesser, assistant director of the Minnesota Department of Natural Resources’ Land and Minerals Division.

Michigan, Minnesota reminded of ripple effects

Residents of iron-rich Michigan and Minnesota recently have been reminded of the ripple effects. Cliffs Natural Resources furloughed about 125 employees at a Minnesota pellet processing facility in January. About 591 employees still work at that facility, according to the company.

The company has announced plans to furlough about 360 at the Empire Mine in Michigan’s Upper Peninsula at the end of March. About 800 employees work at the facility, according to local media reports. Locals are quick to point out previous layoff estimates that didn’t affect the number of workers first announced by the company.

But their experiences make many people in Minnesota and Michigan confused about Gogebic Taconite, the company planning to build an iron mine in northern Wisconsin and promising to hire an estimated 700 people to work there. It’s unusual for any new iron mine to start up in this climate, they said, especially in a place with no existing rail lines and other infrastructure.

Instead, companies are exploring and beginning to mine for copper and other precious metals in Michigan and Minnesota. People have environmental concerns in both states about the “new mines” while supporters hope they will bring in new jobs, mirroring the emotional debate over iron mining in Wisconsin that began two years ago.

“It’s really funny because if you look at the area the Empire and Tilden (mines) take up, these two massive holes in the ground, and it’s just because those mines have always been there that no one thinks about the environmental impact,” said Becky DeWitt, who owns a bar in downtown Ishpeming, Mich., about 20 minutes from both mines. “But then the new one comes in and everybody kind of gets freaked out.”

In Minnesota, the lone iron mine under construction was first proposed by a group of people who owned the mineral rights for land several miles southwest of active mines, in Nashwauk. That group was tired of waiting for an investor, Engesser said, and decided to form their own company to pursue an environmental review and permits.

They then sold the permit to Essar Steel, a global company with roots in India, which is constructing the taconite mine and a processing plant at the site. The mineral rights owners first applied for a state review of the project in February 2005. Essar Steel broke ground in September 2008 and hopes to open by the end of this year.

Other ways to make a living

The uncertainty attached to mining has some residents of Minnesota’s Iron Range seeking other ways to make a living. At Mesabi Range Community and Technical College in Eveleth, the millwright program was full at 34 students planning to maintain and operate equipment at iron mines in the area.

The millwright program’s lab was loud and bustling on a February morning. But only a few feet down the hall, less than a dozen students worked in the mobile equipment service technician lab where they’re hoping to get skills that transfer to any number of industries.

Steve Fairchild, 26, said he opted for this program instead of the millwright. He likes the problem solving skills required in any mechanical job, but would rather work for the state, county or a city. He hopes those jobs will offer more security than a mining job and still let him stay close to home in Hibbing.

“Without the younger generations up here, these small communities aren’t going to survive,” he said.

Dave Ramfjord, the program instructor, said mine shutdowns “are pretty shocking scenarios” for the entire area. He can’t blame the people who pursue a career in mining, but worries that young people in particular are unfamiliar with what layoffs or a plant shutdown can mean for employees and the entire community.

“The schools do well at that point because people are retraining, trying to make themselves marketable in some other way,” said Ramfjord, 50. “A lot of the younger people are kind of close-minded. They don’t realize that (mining) can come and go.”