This year's tax payment from Minnesota's iron ore industry is down 11 percent

Minnesota's iron-mining industry paid $96.5 million in taxes to the state in 2017, down 11 percent from the year before, mining officials said.

Because the taxes are largely distributed to cities, counties and school districts, they are closely watched as a barometer of economic health on Minnesota's Iron Range.

The reduction in taxes paid this year signal the survival of an industry that has weathered hard times. And next year's tax revenue should be more if the companies end this year as forecast.

The taxes paid this year are based on the lower amount of iron ore produced during 2016, according to a report released last week. Taconite-pellet plants and ore-concentrating firms produced 29 million tons last year, down from 33 million tons in 2015, which was down from 40 million tons in 2014.

The decreased tonnage was the lowest since 2011 and nods to a global industry downturn that left seven Minnesota ore-processing facilities either temporarily idled or shut for good in 2015 or 2016.

Global-pricing pressures and reduced demand helped idle more than half of the iron-mining facilities in Minnesota in 2016, said Iron Mining Association of Minnesota President Kelsey Johnson.

"Despite the downturn caused by these significant global pressures, millions of dollars still went into our communities," Johnson said. "This just goes to show what a huge impact Minnesota's iron mining industry has on our region."

Conditions are starting to improve.

The Duluth Seaway Port Authority reported earlier this month that iron-ore shipments from Minnesota across the Great Lakes-St. Lawrence Seaway were at the highest level they have been in 10 years, thanks in large part to heightened demand in Canada, China, Japan and other overseas customers.

Lately, the products are in great demand, said Port Authority spokeswoman Adele Yorde.

As a result, Minnesota's once-idled Keetac, Minntac, United Taconite and Northshore Mining have all reopened in the last year or so and are now operating at full capacity. (Two Steel Dynamic firms in Minnesota — Mesabi Nugget and Mining Resources — have yet to reopen. They have been idle since 2015).

Separately, ERP Iron Ore, an investment team put together by Virginia's health care billionaire Tom Clarke, is attempting to bring the once-bankrupt Magnetation back online in Grand Rapids, Minn., and Reynolds, Ind.

A different Clarke investment team called Chippewa Capital Partners is trying to buy the former Essar Steel Minnesota in Nashwauk out of bankruptcy court.

If successful, the plan is to resume construction on the half-built iron-ore complex.

As for the $96.5 million in ore taxes distributed this year, more than $38 million went to the Iron Range Resources & Rehabilitation Board, which reinvests funds into Iron Range communities, businesses and workforce development.

Nearly $22 million went to local school districts, while $11 million went to property tax relief.

The remaining $25 million went to cities, townships and counties in various ways, according to the state's recently released 2017 Mining Tax Guide.

Dee DePass • 612-673-7725