On the Iron Range, prolonged downturn is taking its toll

AURORA, MINN. – When the mines go down on the Iron Range, everything else seems to follow.

"Everything's just closing down," said Debra Schermann, standing on Main Street Aurora on a chilly spring Tuesday, staring across at the shuttered storefront where she once ran a pet grooming business.

The only grocery store in this east Range town of 1,600 went out of business in January. Aurora's only drugstore shut its doors last summer, a few months after the nearby Mesabi Nugget iron plant idled, throwing 200 people out of work for at least two years.

It has been more than a year since the first layoff notices went out across the Range. The loss of those jobs, and the thousands that followed, cut across the region like a riptide. Two thousand layoffs in the mines triggered 1,350 layoffs among the contractors and mining support industries downstream. When seven of the 11 mining operations on the Range went dark, local governments lost their tax base, shops and restaurants lost their customers, and the entire region was left to struggle through the worst economy it has seen since the steel downturn of the 1980s.

In the interlinked economy of the Iron Range, when one community gets cut, everyone bleeds.

A plant shuts down in Forbes and a father of four in Hibbing finds himself back in a classroom for the first time in years, training for a career that could take him far from the mines. Or the Mesabi Nugget plant idles in Hoyt Lakes, suddenly leaving dozens of families in Aurora to struggle to put food on the table.

"Thank God for this place," said Schermann, turning toward the Aurora Food Shelf, where she picks up groceries for herself and her teenage son.

Before the downturn, the food shelf, stocked with canned goods, produce and baked goods donated by local merchants with the help of almost a dozen churches, might have helped 120 families a month. That number is shooting up. In April alone, the food shelf fed 160 families.

"This does not cover their needs," volunteer Mary Kurtz said. "It just helps."

Towns are strung across the Iron Range like beads on a necklace, tracing the vast ore deposits below. The high-quality iron ore is long gone, depleted by a century of mining and two world wars. What sustains the region now is the flinty taconite that remains — and demand for that ore slumped last year, when a building boom in China suddenly slowed.

An industry that used to employ 14,000 miners had shrunk to a workforce of 4,000 by 2015. Now half of them are out of a job, which makes it harder for everyone else to do their jobs.

Nashwauk Mayor Ben DeNucci, who owns a bar in town, an auto repair shop in neighboring Keewatin and is mounting a campaign for a Minnesota House seat, has watched the downturn hit his customers and constituents.

U.S. Steel put its Keewatin plant on indefinite idle last May, throwing 412 people out of work. Almost overnight, the long lines of cars that gridlocked the street in front of his Keewatin Auto Repair shop during shift changes vanished.

"I look outside now and it's like a ghost town," said Randy Nash, DeNucci's business partner, looking around the quiet garage.

The heavy-duty lift they put in to handle 15,000-pound trucks sits empty. When the mines went down, the contractors and support industries cut back. With thousands of mining support workers laid off, there's no one to drive the heavy trucks, or get them serviced.

That is how the downturn ripples out, DeNucci said. It's not just the miners who hurt. People lose their jobs, businesses lose their customers, cities lose the taconite tax revenue they used to use to pay police salaries, buy new firetrucks and patch potholes.

DeNucci's family has lived on the Range for four generations, through countless iron booms and busts. He bristles at the suggestion that people would, or should, just leave. It's not so easy, he said, to uproot your kids, move away from aging parents, sell a house in the middle of a downturn. It's not so easy to walk away from your home.

"We live where others vacation. That's us," he said. "Our traffic jams are a school bus or a deer. Small-town life isn't for everyone, but it's what we love."

When the layoff notices went out at United Taconite last July, maintenance mechanic Scott Koski had three little girls at home and another on the way — a fifth generation born to the Range. He's doing everything he can to make sure they can stay there.

"I can't crawl somewhere and cry because I lost my job," said Koski, a big guy with a gentle smile, who had been working for United Taconite for seven years before the plant in Forbes shut down, throwing 420 people out of work. "I've got to plan for my family. I've got to go out there and pound the pavement."

While he waited and hoped for a call back to work, he also headed back to school. Koski is one of 570 laid-off miners who have enrolled or are on college waiting lists. Federal money, set aside for workers thrown off the job by global market forces, picks up the tab to retrain them for in-demand fields like health care or diesel repair.

Koski is in his final semester at Hibbing Community College. Of his 20 classmates, about a quarter are dislocated steelworkers like himself. By the end of this semester, they'll have degrees that will allow them to work anywhere as heating and cooling technicians.

"These people need us," said Hibbing college provost Michael Raich.

Hibbing is scrambling to find enough instructors, classroom space and equipment to accommodate all the miners stuck on waiting lists that stretch for months. The college, with 1,000 students and a budget to match, is trying to make room for at least 200 more in the coming semesters.

"If these folks don't go back to work, we're going to be really busy this summer and fall," Raich said.

There have always been workers who head back to school when the mines go offline.

But, "this one feels different," Raich said. "This is a first for us, in terms of the length they've been out. The projections haven't been as optimistic as they've been in the past."

Joe Dasovich steered his patrol car down the streets of his hometown. Past Nashwauk City Hall, past the For Sale sign in the window of the Wauk-In Cafe, past the overlook of the old Hawkins Mine that had been the main source of income in the town until it shut down in 1962.

He cruised by the house where he grew up and took the turnoff toward the half-finished hulk of the Essar Steel taconite plant that was supposed to be up, running and employing 350 of his neighbors by now. But Essar's sister company is in bankruptcy, and Essar Steel Minnesota is trying to restructure about $1 billion in debt, including millions it owes to its contractors and to the state. Keewatin Taconite and Magnetation sit idle east of town, Magnetation Plant 2 in Bovey has closed to the west.

"I'll be honest. I don't feel right, writing somebody a ticket in this economy," Dasovich said.

But generations of downturns and upswings in the ore markets have given Iron Rangers a dogged sense of optimism about their roller coaster economy. When one mine closes, another is sure to open.

Aurora is surrounded by played-out mines. The Meadow mine — the one the town sprang up beside in 1898 — the Fowler, Donora, Mohawk. These days, many pin their hopes on PolyMet and the plan for a copper-nickel mine in Aurora that has been inching through the state's environmental approval process for the better part of a decade. The same global slump that cratered steel prices last year also pushed the copper market into a tailspin.

"You've got to think positive," said Schermann, who lost her dog-grooming business during a downturn a decade ago but still hopes for a fresh start. "I'm going to reopen. We're going to get through this."

In mid-May, Northshore Mining plans to reopen its operations in Babbitt and Silver Bay, calling 200 people back to work. United Taconite is talking about calling its workforce back sometime this year.

In Hibbing, Koski hopes for a callback to United Taconite even as he throws himself into his HVAC studies. Generations of his family have worked in the mines, and been thrown out of work in the mines. He knew going in that it would be feast or famine: "good when it's good and bad when it's bad."

He remembers his father and uncles losing their jobs when the LTV Steel plant shut down more than a decade ago. If his dad worried during the layoffs, he never let it show. Now Koski is doing the same for his four little girls.

"In tough times you persevere," he said. "That's the way it is up here."

Jennifer Brooks • 612-673-4008