Minnesota's iron ore producers have mostly been cutting back lately as global steel demand slumps.
But the CEO of Cliffs Natural Resources gave the state two turns of good news Wednesday, when he targeted a different state in which to idle a taconite plant and announced that he wants to build a "direct-reduced iron" plant in Minnesota that could supply high quality iron to mills across the Midwest.
If the facility goes forward, it would be the only one in Minnesota and would require millions of dollars in investments at a time when the global iron ore industry has seen prices plummet 60 percent from a year ago.
"We are working very closely with the state of Minnesota to put in place the first DR-ready facility in the state of Minnesota to supply the Midwest mini mills with DR pellets," CEO Lourenco Goncalves told analysts during a conference call Wednesday. "So we are not just sitting still here or reducing the size of our footprint. We have a plan."
Other companies, including Essar Steel Minnesota, have announced similar ambitions only to scale back. Direct-reduced-ready pellets are technologically more difficult to make, but they result in a much higher concentration of pure iron than taconite. As a result the technology is coveted by steel mills all along the Great Lakes and Canada.
The idea of possibly expanding in Minnesota caught many Iron Rangers by surprise. The sagging industry already forced Magnetation, Keetac and Minntac iron-ore factories on Minnesota's Iron Range to idle production this spring. Minnesota iron workers feared that Cliffs would simply follow suit.
Instead, Cliffs, which operates Hibbing Taconite, United Taconite, and North Shore Mining in Minnesota, chose to reduce production in Michigan.
"Cliffs has inventory problems so we knew they were going to have to do something, but he chose Michigan," not Minnesota, said Mark Phillips, Commissioner of Minnesota's Iron Range Resources and Rehabilitation Board.
