Projects could spark boom
Lee Bloomquist
Duluth News Tribune - 10/08/2006
Not since the advent of the taconite industry has the Iron Range seen the likes of it.
Six major economic development projects that would cost about $4.2 billion, create thousands of construction and spinoff jobs and 1,300 permanent jobs hang in the balance on Minnesota’s Iron Range.
Some say the projects would invigorate a tenuous economy, boost sagging school enrollments and stabilize communities from the Iron Range to Duluth.
“It would be a mini-boom like we had in the ’70s when they built the taconite plants,” said John Grahek, president of Iron Range Building Trades Council. “I’ve lived here all my life and seen the boom times and bust times. But right now, people are moving out of here because there’s nothing here for them.”
If all six were developed, the projects would inject $10.5 billion a year into the regional economy, according to Tony Barrett, an economics professor at the College of St. Scholastica.
Even if only a few come to fruition, the effect would be of “immeasurable importance” to the Iron Range and to the Duluth-Superior port, Barrett said.
“You get just PolyMet and Mesabi Nugget and you have a boom,” Barrett said. “It’s going to help the harbor, supply companies and the state. If they all came together, it would be so sweet for the Iron Range and Duluth economies.”
Minnesota’s taconite industry, which supplies about 40 million tons of iron ore pellets a year to domestic steel producers, continues to be the backbone of the region’s economy.
Its effect in wages, taxes and purchases is about $2 billion a year.
But employment in the industry has plummeted to about 4,000 from more than 16,000 in 1978.
Industry, business and labor officials know it’s only a matter of time before taconite takes another downturn.
“If your grandfather was a miner and your dad was a miner, it used to be that you could be a miner for life,” Grahek said. “But it’s not that way anymore.”
‘POTENTIAL FOR RENAISSANCE’
While taconite, timber and tourism remain central to the regional economy, diversification is needed to keep residents and stabilize school enrollments, said former state Sen. Doug Johnson of Tower, a former schoolteacher and counselor at Cook and Orr.
Johnson is now a consultant on several of the economic development projects.
“We now have the potential for a renaissance in northern Minnesota comparable to the birth of the taconite industry, which saved our region with the natural iron ore ran out,” Johnson said.
From the time he graduated in 1969 to today, Hibbing High School’s graduating class has dropped from 416 to about 200, said Ron Dicklich, executive director of the Range Association of Municipalities and Schools.
Over the past 35 years, enrollment in Iron Range schools has fallen by about 50 percent, he said.
“School enrollment is your barometer of the economy,” said Dicklich, who is also an Itasca County project coordinator on the proposed Minnesota Steel development near Nashwauk. “The need for these projects is that we’re economically dead.”
Construction work alone on the proposed projects could help the region weather another taconite industry downturn, Barrett said.
“Given the nature of the taconite industry, it should go down again in the next four or five years,” Barrett said. “But if any of these projects go ahead, it’s going to mean thousands of construction jobs, which would help reduce the Iron Range’s exposure to an economic downturn.”
Grahek, whose council represents carpenters, ironworkers, boilermakers, plumbers, sheet-metal workers and other union building trades workers, says even one of the projects would translate into years of work for union employees.
And if several of the projects materialize, skilled workers from Duluth, the Twin Cities and other parts of the state would be needed to supplement Iron Range trades, he said. Most would earn about $20 an hour plus benefits, he said.
“There would be some jobs that would last three or four months, but as far as plumbers and pipefitters, they’d be looking at years of work,” Grahek said. “It would mean a tremendous amount of work.”
Permits for some of the proposed projects are complete.
Starting new resource-based developments in Northeastern Minnesota is a slow process involving local, state and federal officials, environmental reviews, public comment, public hearings and scrutiny from opponents and proponents.
In addition to the six defined projects, two others — a new paper machine at UPM/Blandin Paper Mill in Grand Rapids, and Franconia Minerals hopes to develop a base- and precious-metals mine near Babbitt — could mean more development.
But because permits, financing and environmental issues aren’t resolved for some of the projects, it means they’re far from done deals.
“These are such appealing projects because of their size,” Barrett said. “But you can’t count on them until they break the earth.”
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