St. Louis County, Minnesota

Iron ore, the key ingredient in producing the steel that gird’s a nation’s modern infrastructure, is a central component in the development of an advanced economy. In 2012, the United States was the world’s eighth largest producer of iron ore, generating an output of 54 million metric tons. More than three-fourths of that output came from the iron mines located in a single county of the state of Minnesota: St. Louis County.

All of the iron mining in St. Louis County takes place along the Mesabi Iron Range. The Mesabi Range is a narrow, 110-mile long iron deposit stretching from Babbitt to Grand Rapids that has shaped the economic development of the region over the past century. Iron ore was first discovered in the Mesabi Range in 1866 and extractive operations began in the 1890s, focusing on exploiting the rich reserves of high-grade natural ore that could be processed into steel with little change. However, after extracting approximately 2.5 billion tons of this natural ore, the supply was largely exhausted and in the 1950s, the mining industry began to pivot to a lower-grade iron ore alternative: taconite. Taconite mining targets chert-magnetite ores that are processed and upgraded into higher-grade iron pellets to feed steel mill blast furnaces. To date, approximately 1.6 billion tons of these iron pellets have been produced from Mesabi Range ore.

Both the mining and the processing of iron ore takes place along the Mesabi Range. In 2012, eight iron mines were operational in St. Louis County, producing 41.8 million metric tons of ore. Production rates have remained relatively constant over the preceding ten years, averaging 37.8 million metric tons with a compound annual growth rate of 2%. As seen in the chart, St. Louis County’s iron production drives the majority of national iron production, mirroring its rises and falls. The abnormally low production rate in 2009 was broadly the result of the global economic recession and weak demand from Chinese steel mills.

The iron industry serves as the major force driving employment and economic development in St. Louis County. The three major iron companies operating the county’s primary iron mines and processing facilities are Cliffs Natural Resources, ArcelorMittal, and the United States Steel Corporation. The eight mines operated by these, and other, companies provided 3,970 jobs in 2012. Annually, the iron ore industry in Minnesota generates over three billion dollars in revenue. A portion of these dollars are funneled back into the various counties by several tax levers, including, most notably, the taconite production tax. The taconite production tax is the largest tax paid by the mining industry in Minnesota, levied on concentrates or pellets produced by taconite companies. Counties receive 26.05 cents per ton of iron ore and in 2012, St. Louis County received $11.6 million in taconite production tax disbursements. These revenues act as an important source of investment in the county’s schools, infrastructure, and public programs.

Sources:
United States Geological Survey Data, Iron Ore 2003-2012
http://minerals.usgs.gov/minerals/pubs/commodity/iron_ore/myb1-2012-feore.pdf http://mn.gov/irrrb/images/2014%2520Explore%2520IRON%2520ORE.pdf http://www.revenue.state.mn.us/businesses/mineral/Documents/2013_mining_guide.pdf