Boom time for mines on the Iron Range
July 19, 2012
Duluth News Tribune
Minnesota’s iron mining industry last year posted its highest employment and wages paid in more than a decade, a clear sign of recovery from a disastrous 2009 when all six of the state’s taconite plants shut down for a time.
Data compiled by the Minnesota Department of Employment and Economic Development showed an average of 4,245 direct mining jobs in 2011, up nearly 11 percent from the average of 3,825 jobs in 2010.
And it’s way up from the average of 2,642 jobs in mid-2009 when the global recession was hitting the steel and iron mining industries hardest.
The increase reflects relatively stable demand for domestic iron ore by domestic steelmakers, as little of the state’s taconite is shipped out of the U.S.
The increase in jobs has correlated with an increase in annual production. Minnesota’s six operating taconite plants produced about 38.9 million taxable tons last year, up from 35.05 million tons in 2010, state officials reported. They expect 2012 production to hit 40 million tons, the highest level since 2000 when the state had seven operating plants.
Total wages paid to mine workers hit $357 million in 2011, the highest since recent records have been kept. Even when adjusted for inflation, it’s the highest payroll since 2000.
“The wages paid is up more than the number of employees, so it means they are not only hiring people, they are paying a lot of overtime,’’ said Drew Digby, regional employment analyst for DEED.
The number of mining industry workers should only go up through 2012 and into 2013, barring any major economic catastrophe. Not only are existing companies planning to add staff, but Magnetation Inc. plans to expand its production facilities, adding dozens of jobs, and the long-awaited Essar Steel Minnesota plant in Nashwauk will be adding staff toward production sometime in 2013 with more than 300 employees.
“We also have Keetac moving toward their expansion and Mesabi Nugget looking at their own mine and production facility,’’ said Craig Pagel, executive director of the Iron Mining Association of Minnesota. “We’re seeing the companies both replacing retirees and expanding.”
Pagel said U.S. demand for iron ore and steel is stable and world demand, while slowing some in China, is still growing fast.
“The value of ore worldwide remains high, and that keeps our domestic ore more valuable, and it makes the steel companies that own a lot of our iron ore production more valuable,’’ Pagel said. “We had to ride through that recession (in 2009) but the mining companies had the right long-term plans in place to recover and move ahead.”
Pagel noted the number of related, mining-supply jobs also continues to grow.
The number of steelworkers still is down a bit from 2001, down 25 percent from 2000 and is less than one-third the direct mining employment of the taconite heyday in 1979 when there were eight operating plants and about 15,000 mining company employees across the Range producing 54 million tons of taconite.
The industry does face its first major labor tension in several years. United Steelworkers members at five of the six taconite plants will see their contracts expire Sept. 1. The USW is in various stages of negotiations with Cliffs Natural Resources, U.S. Steel and ArcelorMittal.
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