US Steel's subtle message on its frustrations with regulators
- Blog Post by: Lee Schafer
- February 1, 2013 - 2:41 PM
The theme of John Surma’s speech this week to the Economic Club of Minnesota was that the company he serves as CEO, US Steel Corp., has operated taconite mines a long time in the state and remains a major contributor to the economic vitality of northeastern Minnesota
It was a hardly controversial message, delivered by a genial CEO to a friendly audience.
There was an agenda, of course, if you listened for it. It turns out US Steel is frustrated with regulators.
“There just seems to be a lot more people involved,” Surma said after the speech, when asked about what’s changed in how his industry is regulated in Minnesota. “There seems to be a lot more discussion, and a lot more people who seem to want to be in a position to say no.”
There is a “lack of clarity” in the process as a result.
What also changed for US Steel is the presence of companies like PolyMet Mining Corp., which is seeking permits to begin production of copper, nickel and precious metals at its mine and processing facility at the eastern end the Mesabi Iron Range.
Behind PolyMet are other copper-nickel mining projects not as far along.
Mining for taconite is hardly a clean industry, but it’s had nothing close to the kind of problems that have cropped up with copper and nickel mining in other parts of the world. PolyMet has been grinding away on its permitting process for years.
Has greater environmental review of mining as a result of copper and nickel projects changed the dynamic for US Steel? Surma responded that copper and nickel mining was a different business and he wished those firms well.
US Steel, no matter how aggravated it becomes, obviously can’t move its mines. Short of a dramatic - and unlikely - contraction in North American steel demand, Surma said, there is not much that would cause US Steel to significantly reduce its level of investment in the state. About a quarter of the company’s $800 million capital budget this year will go to Minnesota.
On the other hand, there are choices that will come up someday, on where to build plants with newer technology or otherwise invest the company’s capital.
It was very subtle, but that message was delivered.
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