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Minnesota Jobs to Come with Efficient Iron Plant

October 22, 2009 - 11:24am

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In 1957, Marlene Pospeck moved to the town of Hoyt Lakes, Minnesota, a small, quiet community surrounded by forests and lakes where just about everyone knows everyone else. Little did she know she’d become mayor in 1996 and have to lead the town through economic calamity.

Marlene’s father worked for the local mining company, which opened its doors in the mid-1950s. Her husband worked at the company’s plant for 37 years as a machinist, and the couple raised three daughters in Hoyt Lakes.

So when Mayor Pospeck heard the mining company was bankrupt in December 2000, meaning it would close five months earlier than expected, the townspeople braced for the shock.

“Just about everybody in town was laid off in January of 2001,” Marlene said. “They thought they’d have some transition time. That was pretty devastating for the people.”

The shutdown put more than 1,400 people out of work in the region, including 283 in her town.

“The bottom dropped out of our world here in Hoyt Lakes and across the Minnesota Iron Range,” Marlene said, and she said she feared the workers would move elsewhere.

However, the town’s fortune changed for the better when a pilot project, sponsored by the U.S. Department of Energy, proved that a highly energy-efficient iron-making process pioneered by Kobe Steel Inc., which uses 30 percent less energy than blast furnaces, could be viable in Hoyt Lakes. It paved the way for a series of investments and provided new hope for the small Minnesota town.

Championed by Marlene and many others dedicated to reviving Hoyt Lakes and putting its people back to work, the project gained momentum. By 2007, Steel Dynamics Inc. partnered with Kobe Steel and began construction on the new Mesabi Nugget plant, employing more than 700 construction workers and creating about 65 well-paying permanent jobs at full production, according to the company. In fact, the company expects the energy efficient process at the Mesabi Nugget plant to yield cost savings that will translate into greater profits and a healthier bottom line.

“There were people who were skilled at mining, and they’ll be willing to stay here for these jobs,” Marlene said. “It’s a ray of hope at a time when the town really needs it.”

The Mesabi Nugget plant will be the first full-scale commercial plant to use Kobe Steel’s process, and, fittingly enough, it’s being built on the site of the old mine. The mayor expects it to be completed late in 2009 and to be up to full production sometime in 2010.

“It’s been a long wait, but now that it’s going to be at full production, people are happy,” she said. “It brings a new vitality to our community.”

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