VIRGINIA — The biggest threat to Minnesota’s taconite industry isn’t the global glut of iron ore mined in other nations but rather the vast amount of foreign steel that’s being imported to build Amercian projects.
That was the warning Monday from Lourenco Goncalves, president and CEO of Cliffs Natural Resources, the largest taconite iron ore producer in the U.S.
Goncalves said no foreign iron ore producer can get their product to U.S. steel mills as efficiently as U.S. producers in Minnesota and Michigan. But the U.S. imported 23 percent of its finished steel in 2013, 28 percent in 2014 “and that number hit 33 percent in January,” Goncalves told Iron Range business and political leaders Monday.
“The biggest issue we have in this country is imports,” Goncalves said at the company’s annual mining breakfast to update the region on Cliffs’ problems and prospects at its three Minnesota operations.
Goncalves said America is experiencing a relatively booming economy — including automobile manufacturing and construction — but that too many of the new projects are being built with foreign steel that is made from iron ore from Australia or Brazil, not Minnesota.
Demand for steel in the U.S. is up, but taconite and domestic steel production is flat because of the glut of imports.
“We are not enjoying this growth,” Goncalves said, adding that while the U.S, has imposed sanctions on specific nations’ steel imports, the problem continues to shift to different countries.
Steel mills in the U.S. currently are operating at about 75 percent of their capacity.
U.S. Rep. Rick Nolan, D- Minn., who attended Goncalves’ talk, said the problem is “so-called free trade agreements” that don’t account for fair wages or equal regulations, such as environmental protection.
The U.S. has imposed some sanctions on some kinds of steel from a few countries “but the problem when we try to protect our industry one at a time, like steel, is that it takes years to get through the system and, by then, the damage is done,” Nolan told the News Tribune.
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