Iron Range: Global Connections

As probably the most well defined region on this tour, at least in socioeconomic and cultural terms, the Range has developed a reputation for being somewhat insulated. However, in almost every section of this website, connections with other parts of the world, both other regions in the country and other countries, play a critical role in the story of the Iron Range region. This section of the web page is dedicated to identifying several new and important global connections (especially that of China), as well as to collecting together the domestic and international connections that have shaped the Range over its ten millennium-long period of human settlement.

Australia

Australia is a key player in today’s global iron ore export market.  Because of the country’s proximity to China and the high cost of shipping bulk products like ore, Australia is obviously very involved with Chinese iron ore needs.  The two largest companies in the country are Rio Tinto and BHP Billiton.

Austria

Austrians were one of the many main ethnic groups who immigrated to the Range to work in the mines in the early twentieth century.

 

Brazil

Like Australia, Brazil participates heavily in the global iron ore market.  According to a recent issue of RangeView, Brazil used to primarily export to Europe and the former Soviet Union, but is now competing with domestic iron ore producers in the United States. The largest iron ore company in Brazil is CVRD.

Canada

Canada is uniquely connected with the Range because some of the companies that operate on the Range also operate in locations in Canada. Canadian companies also compete with domestic companies in the lower lakes integrated steel markets.

China

A fascinating and critically important development on the Range in the last few years has been the sudden appearance of massive Chinese influence. Mostly because of events across the Pacific Ocean, unions on the Range have gained a rare victory, jobs are being added at Range taconite plants, taconite companies are making important capital improvements in their facilities, and talk of building steel-making facilities on the Range has been rekindled.  The magnitude and complexity of the relationship between the Range makes the relationship an ideal case study for the interconnectedness of today’s global economy.

China and the Iron Range interact on two fronts.  The first is indirect.  In the last few years, there has been an immense building boom in China.  This boom has caused China to import steel at a rate without global precedent.  The demand is so great that steel companies are shipping steel hot from the West Coast of the United States to the Far East.  However, the Iron Range does not take part in this frantic shipment.  In fact, not an ounce of Iron Range ore has gone to China, ever.  So why then does China have such a profound effect on the Range?  In addition to importing steel, China, being the nationalistic entity that it is, is attempting to import substitute steel exports, and thus requires a large amount of iron ore to be imported as well.  As is discussed in other countries’ sections on this page, there is a large amount of “floating” ore that is exported from Brazil, Australia, and, to a lesser extent, the states of the former Soviet Union.  Since China has been importing so much of this exported ore, the price for the ore has risen.  Combine this with the 300 percent increase in global shipping costs caused mostly by China in 2004, and importing ore to the United States has become more expensive. Normally, the integrated steelmaking facilities in the United States rely partially on this exported ore.  Since the price for that ore has risen so much, it is cheaper to use Minnesota ore in most cases.  This has increased the demand for Minnesota ore, which has caused the six companies that operate in Minnesota to increase production by a significant amount.  The increased demand has resulted also in the aforementioned effects in Minnesota.

The second, and less important, interface through which China and the Range interact is foreign direct investment (FDI).  It is odd to think of FDI from a Less Developed Country (LDC) like China to a More Developed Country (MDC) like the United States, but on the Range, this is what is occurring. A Chinese company, Laiwu Steel, is now a part owner (30 percent) in the United Taconite operation. The relationship is particularly ironic because, prior to very recently, any American company wishing to move into China had to have a Chinese partner company involved.

The relationship between China and the Range raises strange questions with regards to core and periphery, especially if Japan is thrown into the picture.  When geographers examine countries in sub-Saharan Africa, for example, they usually note that European powers still control many of the countries because they maintain control of the economic situation in the country.  Many African countries are very dependent on their former European colonial powers for technology to extract and assemble for shipment raw materials, as well as for an export market for these raw materials.  Former colonial powers will sometimes also control the means of production.  In addition, the foreign power’s presence in terms of population is usually minimal, but quite powerful. The same seems to be partially and increasingly true for the Iron Range and East Asia.  Although it is not the direct export market of Iron Range ore, China right now pretty much controls the price of Iron Range ore, if indirectly so.  Similarly, China and Japan are making advances into owning the technology and means of production by which Range ore is produced.  A Chinese company just purchased a part of a formerly entirely American-owned taconite operation. Kobe Steel developed the technology behind the iron nugget technology, which likely represents the future of the Range.   Moreover, the absolutely minimal Asian population on the Range belies the huge number of jobs that the East Asian countries essentially unilaterally provide.   Asians may only consist of 0.2 percent of the Range’s population, as the region is defined here, but they provide far more than 0.2 percent of employment.

Croatia

Croatians were one of the many main ethnic groups who immigrated to the Range to work in the mines in the early twentieth century.

Greece

Greeks were one of the many main ethnic groups who immigrated to the Range to work in the mines in the early twentieth century.

Ireland

The majority of Irish immigrants to the United States arrived in the middle of the nineteenth century as a result of the infamous potato famine.  As a result, the Irish were somewhat well established in the country by the time large-scale immigration occurred on the Mesabi Range.  As a result, the Irish tended to be the higher-ups on the ground at the early Mesabi mines.  In general, the Irish had jobs such as foreman.

Italy

Italians were one of the many main ethnic groups who immigrated to the Range to work in the mines in the early twentieth century.

Finland

Finns played a key role in the early years of the Mesabi Range, but also were important on the Vermillion. According to one source, there were 38 people born in Finland in Ely, and only 7 born in the United States. Finns were predominately low in the mining hierarchy, doing the semi-skilled and unskilled labor.  The Finnish presence on the Range was seriously reduced after 1907, when Finns played a key role in one of the first major incidents of labor agitation.  After that incident, Finns were the subject of significant ethnic discrimination and the number of Finns working the mines dropped to around forty percent of their pre-incident levels.  Many Finns left the Range, and others made attempts to farm the marginal soils of the Range.

France

The French presence on the Range is almost exclusively a historical one.  While the French were probably the first Europeans on the Range, their legacy mainly lies in an appreciation of their role as voyageurs, who were the harbingers of the fur trade in the North America.

Japan

Historically, Japan has not even been a minor player on the Range.  That all changed in the last five to ten years with Mesabi Nugget, discussed in the section about the future of the Range.  Kobe Steel, a Japanese company, is responsible for the technology behind the project.  If the project is successful, Japanese influence could become extremely strong.

Lower Lakes States

The lower lakes states have, for the entire history of the Mesabi and Vermillion, been the only market for the Range’s ore.  In other words, all of the steel that has ever been produced from Range ore was produced in these states.  This may change, however, as the Range begins to adapt to new iron ore technologies and as it attempts to capture some of the steel production facilities of its own.  The lower lakes states specialize in the integrated steel mill technology, which is widely recognized as being in a slow but steady state of terminal decline.

Northeastern United States

As noted in the sections of this web site on the Mesabi and Vermillion, the northeastern United States had a stranglehold on the Minnesota ranges for much of the Range’s history, despite the fact that residents of Duluth were mostly responsible for their initial development.

Michigan and Wisconsin

Well before there was any iron extraction on the Vermillion or Mesabi, ranges in Michigan and Wisconsin were being heavily mined for their ore.  Much the technology and personnel that existed in the Michigan and Wisconsin mountains made their way over to Minnesota in the late 1800s.

Russia and the former Soviet Union

Although they are major producers of iron ore, a recent issue of RangeView indicates that these countries do not export a substantial amount of ore.  Writes RangeView, “from a world market standpoint, the region is considered self-sufficient, and not a factor in the world market.”

Serbia & Montenegro

Serbians were one of the many main ethnic groups who immigrated to the Range to work in the mines in the early twentieth century. Montenegrins were very prominent on the Range and worked nearly exclusively at the bottom of the employment hierarchy.  Although it is difficult to obtain exact numbers – all people from southeastern Europe were referred to as Austrians at the time because southeastern Europe was under the auspices of the Austro-Hungarian Empire – some accounts estimate that certain mines were up to two-thirds Montenegrin.  The higher-ups in the  Oliver Mining Company did not have a high opinion of their Montenegrin employees.  They believe them to be “not very desireable as they are not good workmen.”  However, the work and living conditions provided to the Montenegrins were absolutely deplorable.  One labor inspector who worked with the construction of the Panama Canal said of the mining camps “I wouldn’t keep cattle in some of the places I saw used for men to live in.” It is no surprise that the Montenegrins then did not live up to the employers’ expectation.

Slovenia

Slovenians were one of the many main ethnic groups who immigrated to the Range to work in the mines in the early twentieth century.

Sweden

Swedes were one of the many main ethnic groups who immigrated to the Range to work in the mines in the early twentieth century.