Surprise revival for iron mines of Minnesota

Spring comes slowly to Minnesota's Iron Range. It's home to the world's largest hockey stick, a place where the lakes are still frozen in late April and vowels roll slowly off people's tongues. For the past couple of decades, the region's economy has seemed frozen as well, its bedrock mining industry slowly dying.

In the past year, however, a new life has been blowing into these ochre hills from an unlikely place. You see it in the noise and dust that spews, 24 hours a day, from the recently dormant iron mine just above town, and in the guarded optimism of residents, used to bad news and silent cranes that claw at some of the world's largest open-pit mines.

In a weird twist on the typical globalization story, China is reviving a local economy that's been one of the most stubborn pockets of unemployment in the United States.

The Asian nation's insatiable appetite for steel fuels global demand for the metal and the ore used to make it. As steel-producing nations around the globe turn out more ingots and flat wire, mines here are once again producing some of the raw material - though most of it is not going directly to Beijing or Shanghai. In one case, a Chinese company helped buy and reopen the bankrupt mine here in Eveleth, sending its ore to Canada to replace raw material bound for China.

Whatever its circuitous route, the result is the same: At a time when many Americans lament the loss of manufacturing jobs to China, steel mills there are producing jobs for lunch-pail workers here whose families have worked the mines for generations.

"If you'd have said a year ago this would be happening, I'd never have believed it," says Joe Strlekar, president of local steelworkers 6860, whose workers were already training for new jobs after being laid off in May, only to get their jobs back when the mine reopened. "Instead of everything coming back into this country from China, it's good to have something going the other way."

This region was built on mining, in a very literal sense. Eveleth's location was moved in 1900, after iron was discovered beneath the town. Erie Mining created Hoyt Lakes from scratch, constructing houses, schools, streets, and shops. In Chisholm, the 81-foot statue of the "iron man" - a miner with pick and shovel, perched atop steel beams - stands guard over the carved-up red hills of the Mesabi Range, testament to a century of labor by the Finns, Serbs, Italians, and Slavs who settled this area.

Families here talk of uncles or grandparents blackballed for union work; oral histories in the Iron World Research Center tell of mine accidents and polka dancing, of 12-hour night shifts and using Sears Roebuck catalogues to teach new arrivals English.

Since then, the region has struggled to diversify. Forestry and mining still provide the most coveted jobs. But only 4,000 mining jobs remain, down from 16,000 in 1980, and many have wondered if Minnesota's iron ore days would become a relic. Thousands left during the mass layoffs of the 1980s, and in 2001 the LTV mine - Erie's successor - shut its doors for good, putting 1,400 people out of work.

So the news that the Eveleth mine was reopening in December came as a welcome surprise. With the dollar down and steel prices soaring, all six state mines are at full production for the first time in years. "It was a very nice Christmas here for a lot of people," says Paul Bachschneider, president of the area Chamber of Commerce.

Bill Matos, a blaster at United Taconite who's worked at that mine for 30 years, says the news was "bittersweet." He was pleased to get his job back, but rues the old company's bankruptcy, which froze his pension two months shy of retirement. "Now I'll have to work at least five more years," says Mr. Matos, in heavy boots and brown Carhartt overalls.

Matos always knew this was the work for him. His grandparents came here from Austria in 1904, and he's never wanted to leave. "If you want any pay, benefits, 40 hours a week," he says, "you'll be in the mines." Some fellow miners went back to school when they lost their jobs last summer, to learn masonry, carpentry, or nursing. But Matos figured he was too old.

"Maybe I would have worked as a bus driver," he says. "If I was younger, I could relocate, but I'm rooted in here pretty well."

These days, Matos says, miners are hopeful, though "even in good times, there's skepticism." He's happiest for the community. Schools, spinoff industries, even car dealerships benefit, he says. "I'd like to see it last another 20 years, for the people who work here, for the sake of the community. The schools are in bad shape. There's nothing for young people."

How long the boom can last is an open question. According to Peter Clevenstine at the Minnesota Department of Natural Resources, the outlook is reasonably good. Demand may slow, he says, but "China's consumption will be there for a long time."

The steel market has always been largely determined by transportation costs. Iron ore is a relatively cheap commodity, and it doesn't pay to ship it long distances. So Minnesota and Michigan mines - which account for about 7 percent of the global production - typically ship only to mills near the Great Lakes. In recent years, the US has gotten more iron ore from big producers like Australia and Brazil, who've glutted the market and lowered demand for raw material.

Because of the ore transportation costs, "there's a limit to how far out you can go to be competitive," says Mr. Clevenstine. "But with the world's supply of iron ore going to China, we've moved out that radius."

Take US Steel's plant in Fairfield, Ala., which now gets its iron from a Minnesota mine. "A year ago, we wrote that off as being best supplied by foreign ore," says Clevenstine. "The economics have changed because of what the world ore price has done."

But experts are quick to recognize the industry's cyclical nature. The dollar could go up, and Brazil and Australia are increasing production to meet demand. "The momentary stability is a good thing," says Frank Ongaro, president of the Iron Mining Association of Minnesota. He estimates that the six mines will spend a couple hundred million dollars more on equipment and services this year than last year, which will benefit the area. "But whether it lasts one year or five years, eventually we are going to return to being entirely dependent on the lower Great Lakes marketplace."

Long term, some state officials hope other developments - like a value-added process allowing mills to turn out nearly pure and more valuable "iron nuggets" to be used by popular minimills - will help the region compete. They're also hopeful about tapping copper, nickel, and palladium deposits.

At the newly reopened United Taconite mine, workers are moving the 75,000 tons of rock that get processed every 24 hours. Yellow trucks that can move 190 tons crisscross the massive open pit, a wasteland of gray rubble.

Due in part to high World War II demand, all Minnesota's high-grade natural ore was exhausted by the 1950s. Since then, local mining has been taconite - a rock that's about 22 percent iron, and is processed into hard little pellets of more concentrated iron.

Drillers bore 16-inch diameter holes into the rock, which are filled with 2,500 pounds of explosives to break out the ore. The average age of miners here is 48, and they've worked at this mine an average of 25 years. It's not an easy life, notes Superintendent Craig Hartmann. Most miners work a rotating mix of shifts that's hard on family life.

But the prospect of retraining in a tight job market was far tougher, and Mr. Hartmann is glad to see his former workers back. "We rattle the town with our blasts," he says. "We make dust and noise. But I can't tell you how many townspeople were happy to feel those blasts again."