Sitting on a stark metal bookcase in the corner of Jack Tuomi’s Eveleth office is a stunning golden phoenix. This particular figure looks more dragon-like than avian, which is fitting. The statue was a gift to Tuomi’s company, United Taconite, from its investment partner. That partner is Laiwu Steel—a company headquartered in China.
The mythical bird that rises from the ashes represents the 2003 partnership between Laiwu Steel and Ohio-based iron ore merchant Cleveland-Cliffs. The venture resurrected the bankrupt Evtac mine and taconite plant in Eveleth, which are now operating as United Taconite. But the legendary phoenix can also be seen rising from the ashes of the old Butler mine near Grand Rapids, the Minorca pit north of Virginia, the Laurentian pit north of Gilbert, the former LTV Steel mine near Hoyt Lakes, and Hibbing Taconite in Hibbing.
Behind these resurrections is worldwide demand for taconite pellets that has soared due to the appetite for steel in China and India. As global demand for steel, and thus iron ore, has climbed, so have prices. World taconite prices, $31.29 per long ton in 2002, are expected to soar to nearly $140 in 2008. (See graph, page 53.) That has forced the world’s biggest steel companies to look for ways to control their raw material costs.
Within the past decade, four of those companies—Laiwu, ArcelorMittal in Luxembourg, Essar Steel in Mumbai, and Kobe Steel Group in Japan—have invested in the Mesabi Iron Range as a way to either feed their North American steel plants or ship pellets to plants elsewhere. When projects now on the drawing board are up and running, these four companies will own just over 40 percent of the state’s annual taconite production.
“The economies in China and India are growing at double-digit rates and they don’t have enough resources,” says Sandy Layman, commissioner of Eveleth-based Iron Range Resources, a state agency that oversees economic development in Minnesota’s mining region. “These countries are looking at making direct investments in the United States, and we are seeing the benefit of that.”
Five years ago, taconite production on the range was dropping. Not any more. Production has increased more than 12 percent from its recent low of 34.3 million long tons in 2003 to a projected 38.7 million long tons this year, according to the Minnesota Department of Revenue. “These are changing times in a changing marketplace,” Layman says. “It is a new world on the Iron Range.”
