Forward, Into The Past

Forward, Into The Past

Taconite, timber, and tourism remain the Northland’s economic bases. But they need to be alloyed with entrepreneurship.

Besides both being extractive industries, iron ore and petroleum share something else: Just when you think we’re about to run out of them, a new source appears.

How long that will be the case is anyone’s guess. But 20 years ago, a great many people were thinking that there wasn’t much extractable oil left in the continental United States, and not much taconite left on the Iron Range. In the mid-1950s, “natural” iron ore was overtaken by taconite mining and processing. But with the collapse of the U.S. steel industry in the late 1970s and early 1980s—which included the closing of U.S. Steel’s Duluth Works in 1981—it appeared that the taconite industry was heading underground.

These days, of course, petroleum is pouring out of the oil sands of Canada and the Bakken Formation in North Dakota. And after a recession-induced slump, the Iron Range is producing an abundance of pellets once again. In fact, there are several new production facilities under construction or being considered on the Range, including taconite projects by Essar Steel Minnesota, Cliffs Natural Resources, and Magnetation.

Iron ore isn’t the only type of mining here. In the past decade, two startups with major financial backing, PolyMet Mining and Twin Metals, have been exploring the possibility of extracting gold, copper, and other precious metals from rock formations north and east of Duluth. The PolyMet project is the furthest along, and is waiting for the Minnesota Department of Natural Resources, the U.S. Army Corps of Engineers, and the U.S. Forest Service to release a supplemental draft environmental impact statement (EIS) on its proposed metal mining. Permitting could come some time next year.

Maybe. These precious-metal mining projects are extremely controversial. Even if the PolyMet project gets its permits, lawsuits by environmental groups and others will most likely postpone the first real dig in the area. The chief concern is that sulfides released in the mining process could harm the fragile water systems in the area. At the same time, a great many Iron Range residents north of Duluth are eager for the jobs that PolyMet could bring in—unemployment remains relatively high, and mining jobs are now some of the best paying in the state.

But there are a lot fewer of them than there used to be. In the early 1980s, “the steel industry and thus the taconite industry began a 12-year transition to a more efficient, mechanized, market-responsive model,” says Aaron Brown, a journalist, educator, and blogger who’s lived nearly all his life on the Iron Range. That transition also would lead to “the end of overstaffed mines and the largess that dominated the industry in the 1970s. With that came far fewer jobs, and the continued bleeding of population.”

While the 1990s would turn out to be a funeral for the 20th century Iron Range, few saw it that way at the time, Brown says. And the new century has brought back a strong demand for iron ore. “But what remains outside the mines is a vast economic cauldron of neglect,” he adds.

Extractive industries are certainly not the gold mines they used to be. The forest products industry has been whacked particularly hard: The closing of the Georgia Pacific hardboard plant in Duluth last year, along with the recent downsizing of the Boise paper plant in International Falls, are evidence of the fragility of timber-based businesses.

On the other hand, in Cloquet, Sappi is repurposing its pulp plant, which has been operating for more than a century, to make chemical cellulose for textiles and other applications, which are currently more in demand than paper.

The economy of the region is closely tied to the land. Tourism, long an economic keystone in northern Minnesota, picked up some of the slack in the 1980s and has continued to provide jobs, but those jobs don’t pay as well as those in often-unionized extractive industries.

And many who love the area have expressed concerns about how dependent the region remains on those industries. How long will the latest iron ore boom last? Will there be another boom after what history would say is another bust? When it comes to mining and timber, outside companies and investment groups call the shots.

Duluth has had success breaking the traditional boom-and-bust cycle by diversifying, expanding its bases in health care, aviation, specialty manufacturing, and education, as well as tourism. The Iron Range Resources & Rehabilitation Board also has been pursuing economic diversification, most recently with a new facility for plant-based resin company Segetis, which is based in Golden Valley.

“This region was developed as a region of employees—people working for someone else,” says Elaine Hansen, director of the University of Minnesota Duluth Center for Economic Development, one of numerous organizations encouraging entrepreneurial endeavors in the region. Communities, she adds, “want businesses, but they didn’t always appreciate entrepreneurs. That has been changing.”

What the Northland needs for its future prosperity, perhaps even more than gold or iron, is an entrepreneurial mindset—particularly among younger people who love the region for its own sake, rather than for what can be pulled out of it.

Related Stories