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Socked by a global iron and steel price collapse, U.S. Steel is asking the state for a reduction in the cost of its state-owned mining leases, which currently fund trusts benefiting Minnesota universities and schools. The company needs to reduce costs by about $25 million to reopen its Iron Range properties.

The 114-year-old Pittsburgh-based company announced earlier this spring that it would indefinitely idle its MinnTac and Keewatin Taconite operations starting in June. Now company officials say they need to trim production, energy and state lease costs to reopen before the end of the year, portending a shutdown of at least six months no matter what the legislature does.

The news became public last night on the floor of the State House of Representatives as Rep. Tom Hackbarth (R-Cedar) along with Rep. Tom Anzelc (DFL-Balsam Township) offered an amendment to the environment bill requesting that the DNR renegotiate the lease rates for state-owned mining land, which is particularly important for U.S. Steel’s Keewatin Taconite property, which has the most state trust fund land. State Sen. David Tomassoni (DFL-Chisholm) did the same in the Senate bill. The inference is that doing so would shave months off the length of U.S. Steel’s shutdowns.

While U.S. Steel is doing the asking, any mine on state leased land would also see lower costs. The scram mining operation Magnetation on the western Mesabi Iron Range would certainly benefit, though there are scattered pockets of state-owned mining land throughout the region.

A lower lease rate would reduce the amount going into the state’s permanent school trust and funds that benefit the University of Minnesota system. However, the principle of those funds would not be reduced, and they would both continue to pay out annual payments to Minnesota schools and universities — though the funds would grow more slowly.

It would appear that between moving highways, reducing environmental standards and now asking for freedom from state lease obligations, that Iron Range mines are in a ferocious battle for survival. Lawmakers and Iron Range communities will face hard questions about whether to give in to company demands in coming months or to hold firm. The region’s lack of economic diversity gives the Iron Range fewer options, a topic I will address in my Sunday column.

Yesterday, Keewatin Taconite announced it would keep about 175 workers on through June to perform maintenance projects, reducing the blow to some miners. But that’s only about a month of work for some, and the shutdown itself could last through Christmas unless conditions change.