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Duluth’s ore docks are seeing fewer of the vessels that carry bulk commodities like taconite pellets for steel mills.
Duluth Seaway Port Authority Director Adolph Ojard said steel mills are cutting back, which means they’re consuming “a lot less iron ore pellets.”
“We’ve finally begun to see the impacts of the, I guess what we would term now the recession,” Ojard said. “The steel mills have started to cut back. They’re operating at 60 percent of capacity.”
Iron pellet shipments on the Great Lakes dropped more than 1 percent in October, compared to the previous October, according to a shippers group.
Ojard said some ship owners are already calling it quits for the winter — a month or more earlier than usual.
“Three weeks ago we saw the first of several ships layup,” Ojard said. “Several more have laid up in the lower lakes and everything I hear right now is that it will be an early end to the navigation season.”
The downturn hits Minnesota’s iron mining just as it’s planning to expand. Taconite producer KeeTac wants more capacity at its Keewatin plant. Mesabi Nugget is constructing the state’s first iron nugget plant in Hoyt Lakes, and Essar Steel Minnesota broke ground a month ago for an iron mine and steel mill near Nashwauk.
However, Craig Pagel, president of the Iron Mining Association, said there’s no sign those companies are abandoning their expansion plans. “You continue to look forward, not just react to what’s happening over a 12-month period,” Pagel said.
Also, the recession probably won’t thwart plans for regional projects aimed at mining precious metals, including copper, nickel, platinum and gold. For example, PolyMet Corp. still hopes to begin work on a Hoyt Lakes mine next year, despite drops in metals prices.
Frank Ongaro, with the industry group MiningMinnesota, said the projects are still viable.
“Every indication is that even with global demand reduced, domestic demand reduced, that long term, domestic and global demand will still see growth,” Ongaro said. “And with metal prices down as they are, these are still extremely attractive projects.”
He noted that those precious metals are important for modern electronics and other products.
“We don’t see anybody going without cell phones and laptops and catalytic converters and all of the things that are essential to our daily lives,” he said.
