More steel and speculation in this week's Biz North

Wayne Nelson and the writers at Business North do a fine job of covering the economic news of northern Minnesota and Wisconsin. This week's edition has a couple of interesting Iron Range stories.

First, this story reviews Essar Global's North American steel ambitions, something I talked about earlier in the week. This is the company that is in the process of buying Minnesota Steel, a proposed mining and steel-making operation on the Iron Range.

Then this story explores how the Iron Range is currently driving the region's manufacturing and service economy in advance of what is still believed to be a potential economic boom.

Minnesota Steel groundbreaking delayed

Financial close on Essar's Minnesota Steel plant has been delayed until May or even June, according to reports I'm hearing. I have confirmed this in Range political circles. The worldwide financial market is bad, so Essar is having trouble locking in on "financial close" for what would be the first iron to steel facility on the Mesabi Iron Range in northern Minnesota. The worldwide steel demand is holding steady so officials remain hopeful that this delay is only a formality. The danger is that the longer construction is delayed the greater the risk of the steel market slowing and further jeopardizing the financing. Wayne Nelson of Business North said something similar on 91.7 KAXE April 14. A report of a similar nature ran on WDIO last night.

On a more positive front, I have received word that several Essar engineers are working on the Iron Range right now on massive amounts of pre-construction planning. I hear they are Essar regulars, not locals that have been subcontracted. While not as good as a groundbreaking that is the next best possible news. Again, shovels in the ground are the only true indicator of a project go-ahead.

This project would be the biggest job creation project on the Iron Range in more than a decade and would solidify the region's place in the global steel market into the foreseeable future. The project isn't beloved by all, but it is by most, and the idea makes much more sense than several other economic development ideas currently out there.

Nashwauk steel plant still 'go for launch'

Business North is reporting that a groundbreaking announcement on Essar Global's Minnesota Steel iron mine and steel plant near Nashwauk is expected this month. So far, so good. Essar has a lot of "irons" in the fire, however, and I won't pop open a bottle of anything expensive until I see really big shovels in the ground. As you see in the story, this major international corporation has a lot of different ways to get the steel it needs for its Chinese and Indian markets.

Tomorrow's news today

Business North is reporting the item about Friday's U.S. Steel announcement in Keewatin. Here's what they say:

It’s the worst-kept secret on the Iron Range: All indications point to a major expansion pending at Keewatin Taconite.

Owner U.S. Steel wasn’t commenting publicly, but told Range legislators to expect a Feb. 1 announcement that is “positive.”

U.S. Steel already has air quality permit amendments in hand for a mining expansion at the Keewatin mill. A rumored expansion on the order of $350 million would increase the plant’s production capacity by more than 3 million tons, making it second on the Range only to Minntac, also owned by U.S. Steel.
The operation produced 5.3 million tons of taconite in 2007, employing 375 Steelworkers.

I talked to Business North editor Wayne Nelson last weekend at the KAXE Annual Meeting. He knew about it and I knew about it but we couldn't say for sure, so we just nodded a lot. Then I went to work Monday and all my mining technology students already knew about it. Yeah, this one is pretty much out there. Good news, though, so U.S. Steel probably won't deploy their P.R. plumbers.