‘There’s nothing else’: The Iron Range is rallying to save Hibbing Taconite

William Fredette, recording secretary for USW Local 2705, leads a march through downtown Chisholm on Saturday, Oct. 29, 2022. (Photo by Jerry Burnes)

Jerry Burnes/Iron Range Today

CHISHOLM — The closure of Hibbing Taconite hadn’t arrived in downtown Chisholm, a city of about 4,700 people, as union organizers set out hundreds of signs and gathered on the sidewalk in front of their hall.

Closing the taconite mine, a decades-long employer of about 750 workers with an outsize impact on the local economy, has loomed for years over the United Steelworkers Local 2705 and Cleveland-Cliffs, the majority owner of the mine.

It harkens back to darker times on the Iron Range, where outside economic pressures would shudder mines for months at a time, and in some cases permanently, squeezing the pockets of community members that benefited from high-salary workers spending their money close to home.

The impact of losing Hibbing Taconite could be extensive.

The East Range cities of Aurora and Hoyt Lakes are still feeling the impacts of the 2001 closure of the LTV mine and 1,400 jobs lost. Businesses struggled and eventually closed, while residents have described a steady stream of taillights leaving town during the morning commute, off to opportunities in other cities. They still hold out hope for PolyMet, a copper-nickel mine that would operate on the ruins of LTV, creating more than 350 jobs. It’s only a fraction of what was lost, but it’s a lifeline for the region. 

“We lost our only grocery story, we lost our only dentist, we lost our only pharmacist. It ravaged northeastern Minnesota,” said Dave Lislegard, a state representative from Aurora who was among those laid off from LTV. “But there’s a difference — when those 1,400 jobs were lost 20 years ago, there were places for them to go — they were absorbed into other industries or other mines. These 750 jobs, there’s nowhere to go. There’s no other place they can go to. That’s a really, really big deal.”

For the  communities surrounding Hibbing Taconite, there are two clear outcomes: Either the mine closes — for good — or Cliffs is awarded state minerals leases in Nashwauk, providing it a chance of decades of more production.

The prospect of new ore to mine versus closing down has sparked a renewed effort to convince state officials that mineral leases going to Hibbing Taconite are in the best interests of the Range. 

Minnesota mines pay production taxes to the state in lieu of property taxes, helping to fund local schools, municipalities and an economic development fund of the Department of Iron Range Resources and Rehabilitation, which in part attempts to fuel projects that move the region beyond its mining dependency. 

“Housing market, schools — all that stuff suffers when these mines go down,” Local 2705 President Chris Johnson added. “That’s why we feel the community will rally, because they know. I had friends that lived it. Their parents had to find other jobs, some were able to be absorbed by other mines, but there’s not that many jobs now.”

Several hundred people marched down Lake Street in downtown Chisholm in support of Hibbing Taconite. (Photo by Jerry Burnes)

It was a cool Saturday morning on the Iron Range that trended into an unseasonably warm day by northern Minnesota standards for late October. Around the Local 2705 union hall there was a buzz. Days earlier, Cliffs was calming down a report that it would be closing Hibbing Taconite in 2024, with CEO Lourenco Goncalves calling it inaccurate.

Since the mine is running out of iron ore to dig from the ground, the finite end of its operations remains a moving target that close watchers estimate between 2024 and 2026, depending on the rate of production and how quickly Cliffs can access state mineral leases in nearby Nashwauk.

The leases are a high-interest topic — around the company, union and local elected officials — holding the keys to decades worth of iron ore from the former Butler Taconite mine that shut down in 1985 under the weight of economic pressures. Delivering them to Hibbing is equal parts politics and process.

“A couple of governors have given Essar a shot at being a viable company in Minnesota and it just hasn’t come to fruition,” Johnson said. “Cliffs have been around for years, they’re proven, they have a vested interest in what happens. We don’t see why they didn’t just look at that and say, ‘We’ve been down this road before, we’re going to give it to Cliffs,’ but that was the past.”

He continued: “This is real. This is going to happen if we don’t get land. That is the land [Cliffs]  says we need. We need the governor to work with us to try and get that.”

When Essar Steel Minnesota first broke ground on the Nashwauk site in 2008, the proposed project was seen as the beacon for the Iron Range’s future with a new mine and the state’s first-ever steel processing facility. 

As quickly as the project ascended, it would fall into a $1.1 billion bankruptcy filing by 2016, the promise of a steel mill long scrapped and replaced with missed payments to the state, millions in taxpayer dollars and hundreds of prospective jobs hanging in the balance. Through a lawsuit filed within a year, it was found that parent company Essar Global siphoned off hundreds of millions of dollars from the project to fund its other operations around the world.

The bankruptcy process would leave to Cliffs bidding on the project — at a rate Goncalves felt was fair for the assets — but losing to an unknown named Mesabi Metallics, led by Tom Clarke, a former health care executive from the state of Virginia, a company soon connected to Essar Global through its financiers. 

Six more years of court battles, starts, stops, funding issues and missed payments led to the state eventually pulling the leases from Mesabi Metallics this year, creating the opening Hibbing Taconite had eyed for more than a decade. So far, the state Department of Natural Resources has unanimously prevailed in a lawsuit and appeal filed by Mesabi Metallics, arguing that Minnesota officials were incorrect in their actions. An appeal in the coming weeks could arrive at the Minnesota Supreme Court, which could take on the case or side with the lower court.

Each passing day, as ore leaves Hibbing Taconite, is another day closer to some sort of closure for Local 2705. If the DNR remains in control of the leases, the agency has said it will need to reach a lease terms with a “credible miner” and bring the agreement to the state’s Executive Council, which consists of the governor, lieutenant governor, attorney general, secretary of state and auditor, for sign off.

“Given current legal restrictions and the remaining steps in the leasing process, we don’t have an estimate on when we will be able to propose new leases for the Nashwauk ore,” the DNR said in a recent statement. 

It’s expected that Cliffs and U.S. Steel will be in immediate consideration for the leases. U.S. Steel last year expressed its first real interest in the site and more recently announced plans to convert its nearby Keetac mine into a direct-reduced iron facility. In a statement, Cliffs said it was confident Hibbing Taconite would prevail in the process.

“We are confident that the governor, the State of Minnesota and the DNR will work with us to make Hibbing Taconite’s future secure,” the company said.

Local 2705 President Chris Johnson walks with his son during the march in Chisholm. (Photo by Jerry Burnes)

Lislegard, the state representative from Aurora, knows the first-hand experience of a mine closing.  He was one of the 1,400 laid off LTV workers out of a job and forced into making a decision about his future with a young family. They chose to stay home, where he sought an education and later became a community organizer, city councilor in Aurora and later the city’s mayor before ascending to the state House.

The specter of LTV was close to the minds of the hundreds that marched down Lake Street in Chisholm. With the help of a bullhorn, William Fredette, recording secretary of Local 2705, and the crowd traded chants until reaching their destination at Chisholm Armory, carrying signs emblazoned with the USW logo and phrases about saving the mine and region.

Johnson, the Local 2705 president, estimated about two jobs in the community are lost for every mining job, which if accurate, would place a staggering 2,200 jobs across the region at stake. 

State Rep. Julie Sandestede, DFL-Hibbing, said the direct job loss from Hibbing Taconite would cut almost 8 million tons of taxable iron ore from state coffers, eliminate millions in annual payroll from jobs that carry salaries of $125,000 a year with benefits and $22 million in annual taxes paid by Cliffs. Those impacts would trickle down to the United Way, local food shelves and other community organizations supported by the company and workers.

“There isn’t another place in the state of Minnesota that I’ve heard about that’s losing, or runs the risk of losing, just under 800 jobs — that’s not OK,” she said. “These are real jobs, with real benefits. This comes down to working families on the Iron Range.”

Lislegard, DFL-Aurora, repainted the bleak picture of his city in the aftermath of LTV. To reach some of those services, residents have to embark on a 20-mile drive. 

Julie Sandstede (top) and Dave Lislegard (above) spoke on the potential impacts of Hibbing Taconite closing. (Photos by Jerry Burnes)

Despite LTV’s closure, the East Range has had a light at the end of the tunnel, he said, pointing to the PolyMet copper-nickel project that’s still almost two decades into the environmental review and permitting process. 

In Aurora, the community has seen the optimism about the project bear some fruit. A local realtor and construction company have made the city home in recent years, and the former union hall for LTV workers — once a food shelf — has plans to become a locally-owned grocery store. 

Hibbing Taconite miners will face a tougher decision if the plant closes, Johnson added, pointing to Cliffs’s larger footprint — dozens of locations across the nation — allowing for some opportunities on the Range, but others may be compelled to states like Michigan, Ohio or elsewhere. Others may choose a new career path similar to Lislegard, unless Minnesota officials step in.

“This place shuts down and there’s nothing else,” Lislegard said. “And why are they going to shut down? It’s because of a lack of ore. There is an opportunity to save these jobs.  When this is all said and done, and those state leases come up, it’s imperative, the state of Minnesota works with Cliffs to get these leases, to save these jobs.”

Johnson said he understands the moving parts that placed Hibbing Taconite in its current scenario, but acknowledges missed opportunities from all parties when considering where the blame falls. 

Those decisions are all in the past now and the most pressing issue faced by Local 2705 is that the mine is out of options without the land in Nashwauk, a fact he hopes resonates with Gov. Tim Walz or his potential successor after Nov. 8 and the community members that stand to lose if Hibbing Taconite closes.

“We’re going to hope. We’re going to fight. We’re going to hope,” he said. “We’re going to do everything we can to make sure we can stay open with the people we have right now. Ultimately, in the end, that’s not going to be up to us. That’s going to be up to whether we get land or not.”

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