The state of Minnesota is providing financial relief to U.S. Steel by reducing for 15 months the amount of royalty payments the company must make for its taconite mines.
The relief comes by way of an amendment to iron ore mining leases that was approved Wednesday by Gov. Mark Dayton’s executive council.
The ultimate dollar value depends on production, but one scenario could reduce payments to the state by $4.3 million, according to background materials presented to the executive council.
“The iron ore industry in Minnesota has experienced an economic downturn due to steel imports,” state officials wrote in the materials.
In response to the global iron-ore pricing slump and the rush of underpriced steel imports into the country, U.S. Steel said in May it would lay off about 400 workers when it reduces production at its Minntac taconite plant in Mountain Iron, Minn.
In March, the company announced plans to idle its Keetac plant in Keewatin, affecting 412 workers.
In comments to reporters Wednesday, Dayton said he supported the change, but only reluctantly.
There are “hundreds of people up there who stand to lose their jobs if they shut down permanently,” Dayton said.
Still, the governor questioned whether the financial relief was large enough to make a difference for the company. He also expressed concern that other manufacturers will seek state aid, too.