Steel plant proceeds slowlyby Bob Kelleher, Minnesota Public Radio
A new taconite mine combined with a steel plant is coming together on Minnesota's Iron Range. Officials with Minnesota Steel Industries plan a $1.6 billion iron-to-steel operation near Nashwauk. But environmental permitting is taking longer than they expected.
Duluth, Minn. — Minnesota Steel Industries could be the state's biggest industrial construction project in at least 30 years. Eventually, the plant would employ more than 700 full time workers.
But nothing's going to happen on 7,800 acres near Nashwauk until federal and state officials issue environmental permits. For the project's developers, the permitting process is painfully slow.
Company officials say a draft Environmental Impact Statement once expected this month, won't be ready until February.
"That has delayed the process," says John Elmore, Minnesota Steel Industries President and CEO. "That is an issue to us. That is an issue to potential financiers."
Lenders aren't going to write any big checks until the permits are in hand. And the permits won't be issued until the environmental studies are done. It's a complex dance, with federal and state regulators taking the lead. But Elmore is finding that Minnesota is a tough state with which to dance.
"Minnesota is a difficult state, and for a lot of the right reasons," Elmore says. "You know, we have to be a very good environmental stewards. But the process, I believe, it's a very tenuous process within the state. It is not competitive with other states in the union. But, be that as it may, it's what it is."
Elmore tries to put a positive spin on things.
"I believe that we will have a very high quality of work product that will come out, and that that will minimize the time on the back side," Elmore says.
Despite the size and complexity of the project, the pollution issues are typical for a large mining and industrial operation. Air emissions will be minimized by using natural gas and electricity as the primary fuels. If there are organized opponents they've been relatively quiet.
A state official working on the EIS says the environmental studies do take time, but there's nothing particularly holding things up.
"This is not unusual," according to Steve Ek, Principal Planner on the project for the Minnesota Department of Natural Resources. "And, I don't believe the process has slowed down. The DNR and PCA have been hard at work on this project."
But there has been one expensive glitch. There's little chance of getting the company a waste water permit any time soon.
"We are not issuing waste water treatment permits that are located in the upper Mississippi River watershed," says Lisa Thorvig, Deputy Commissioner of the Minnesota Pollution Control Agency. "(That's) because of an Appellate Court decision on Annandale/Maple Lake that said we could not allow an increase of pollutants that would cause or contribute to the water quality violations in Lake Pepin."
Even though Lake Pepin is a couple of hundred miles away, it's part of the same watershed. The Appelate Court ruled that the watershed can't take any more phosphorous in waste water, and Minnesota Steel expected to release a very small amount of phosphorous. The case is under consideration by the State Supreme Court, but John Elmore says it created an uncertainty that's going to be costly to fix.
"We cannot count on, one, when the Supreme Court ruling will come out, and, two, what the ruling will actually be," Elmore says. "So we're planning on a worse case scenario and we're going forward on the path, and on that premise."
Instead, he says, Minnesota Steel is now planning a costly system to recycle its wastewater rather than release it.
Under the best of circumstances, there still won't be much activity at the Nashwauk site before summer.
The project's draft EIS is scheduled for publication February 12th. It's a joint federal and state document. Federal rules require a 45 day comment period after publication. Once comments are addressed, the EIS faces formal approval from both state and federal regulators. Only then can environmental permits can be issued.
Minnesota Steel's John Elmore is optimistic. He's hoping to close financing in April, with site preparation and construction to follow. Thirty months later, Minnesota Steel Industries expects to produce the region's first slabs of steel.
- Morning Edition, 12/19/2006, 7:20 a.m.