Lee County’s Board of Supervisors has passed a resolution supporting construction of the steel plant that an India-based company has proposed in southeast Iowa. That resolution is required for the company to qualify for nearly $1.4 billion in state incentives.
The county and Mesabi Metallics have also reached an initial agreement that would cap the amount of property taxes the company would pay at $50 million over the first 20 years the plant is producing steel. Joe Broking, the Minnesota-based CEO of Mesabi Metallics, said the company is getting close to acquiring the land for the plant. “One of the things we like about Iowa is access to infrastructure — first of all road and rail,” Broking said. “…The site sits on the river. (It’s) very, very important for us to have access to the Mississippi River for both inbound and outbound logistics.”
The company plans to use water from the Mississippi in the steel-making process, too. “We’re already filed our preliminary air permit and we’ll be working with the regulators to comply with…some of the most stringent regulations in the world…federal and state regulations on air….(and) in water.”
Broking indicated the company is working with Alliant Energy to figure out how to bring electricity to the site. “Whatever cost is associated with the incremental power generation and transmission related to this site…that’ll be borne by the company,” Broking said. Mesabi Metallics also needs a natural gas pipeline to be extended to the facility and Broking said Mesabi is negotiating with natural gas companies to get come up with a plan.
Broking said the iron ore pellets the company will produce in Minnesota have far fewer impurities and will be shipped to southeast Iowa to make steel. “That process will reduce carbon emissions by 60-70%. That is massive,” Broking said. “At the same time, we can be cost competitive with anybody in the world.”
Broking discussed the company’s plans last week at a special meeting of the Lee County Board of Supervisors. “Taking our product all the way from mining in northern Minnesota to melting and pouring in Iowa. This is really exciting because we can decarbonize the steel industry — which is heavy, heavy polluter — and at the same time we can do it in a very cost effective way, making steel cost effective, not having to rely on tariffs.”
Some critics have questioned whether the steel plant will be built given the company’s background. Broking said Essar Group, which owns Mesbai Metallics, did file for bankruptcy a decade ago and reorganized just like other well-known companies in the industry. “US Steel was restructuring its Delco plant in Canada at the same time and Cleveland Cliffs actually put all of its Canadian assets into restructuring and let them go,” Broking said. “At the time we saw global commodity prices go for a high in iron ore from $200 a ton down to $37.50 a ton and our owners showed a lot of perserverance and determination and they were unwilling to give up this project.”
Broking told the crowd the company’s iron ore mine in northern Minnesota is close to producing the pellets that would be used to make steel. He indicated the company hopes to break ground for the steel plant in southeast Iowa next fall.
