In 2015, while the broader American economy grew modestly, global market conditions and competitive pressures from overseas resulted in the idling of iron ore mines and layoffs for thousands of people who work in the mining industry. The numerous businesses that provide support to the mining operations – businesses like ours – felt the detrimental impacts as well.
Today, many of these iron ore mines remain indefinitely idled and hundreds of individuals are still waiting to return to work.
It can feel overwhelming when the industry that is the economic engine of our region is suffering due to global pressures that are out of our control. However, we should remember that we can do something: we can support policies that contribute to the long-term competitiveness of Minnesota’s taconite industry and we expect the State of Minnesota to do so as well.
That is why we support the ‘energy intensive – trade exposed’ (EITE) electric rate petition, filed last month by Minnesota Power.
Energy accounts for a quarter of the cost to produce a ton of taconite pellets. And even though our region’s mining operations take every opportunity to increase their efficiency, the nature of taconite production requires a lot of energy. Approval of this filing will make electric power more competitive for these core energy consumers.
Rate relief is needed urgently. Electric rates for the iron mines have increased over 60 percent since 2007, and without the EITE rate adjustment, they are projected to go up another 20 percent in the coming five years.
These increases to our energy costs are not sustainable in a competitive global market where foreign companies benefit from government subsidies and “dump” steel in the United States at prices well below the cost of production, displacing steel manufactured from Minnesota’s taconite pellets.
That is why the Minnesota Legislature passed legislation that would put ‘energy intensive trade exposed customers’ on a more level playing field with foreign competitors. The Legislature recognized this rate credit will be one important factor that helps support an economic recovery on the Range and helps keep the industry competitive in the face of global market pressures. The Minnesota Public Utilities Commission must recognize this as well by approving this important rate adjustment that will help keep Northeast Minnesota’s major industries and our communities strong.
We encourage you to learn more about the EITE proposal and how it will help businesses in your community by visiting www.taconite.org/call2action
Nels Ojard, president/CEO
Krech Ojard & Associates, Duluth
Randy Abernethy, president
Industrial Weldors and Machinists, Duluth
Jerry Fryberger, chair
Hallett Dock Company, Duluth
Bruce Mars, executive vice president/ president
WP & RS Mars Co. /Conveyor Belt Service, Inc., Duluth
Dwight Day, president
TUFCO, Inc., Eveleth
Jason Janisch, vice president
Bill Whiteside, president
W. R. Whiteside & Equipment, Hibbing
Jim Perry, president
Furin and Shea, Hibbing
Art Lind, president
Lind Industrial, Hibbing
Jim Hoolihan, president
Industrial Lubricant, Grand Rapids
Steven Harms, territory manager
Pit and Quarry Supply, Virginia