Parkland site in running for Magnetation pellet plant

Superior, Douglas County, and its development team — the Chamber, Development Association and Business Improvement District — are in talks with Magnetation about siting its proposed pellet plant in the Parkland Industrial Park.

If successful, the plant would bring a $300 million investment, 700 construction jobs and 150 permanent jobs averaging $68,000 in wages and benefits to Douglas County.

Superior Port and Planning Director Jason Serck and Douglas County Administrator Andy Lisak said the talks are in the early stages, but the public could begin to see notices in the newspaper soon as the two units of government consider a variety of proposals to accommodate the project.

“We’re doing our due diligence to make that happen,” said Mayor Bruce Hagen. He said the city and county are working with the Department of Natural Resources and looking at local and state resources to make the project happen here.

There is stiff competition with Indiana, Illinois and Minnesota, Serck said. Because the property is owned publically, city and county officials are obligated by state law to notify the public before decisions are made.

Magnetation officials have said an Itasca County, Minn., site between Coleraine and Grand Rapids would be a prime location but they will consider others. Pellets from the plant would go by rail to AK Steel’s two blast furnaces in Middletown, Ohio, and Ashland, Ky.

As early as next week, county officials could be asked to consider a proposal that would give the company an option to purchase the 150-acre parcel in the Parkland Industrial Park so Magnetation could start the permitting process for the project. The option agreement would give Magnetation site control, which would allow the company to begin the process.

“With a project this size and the permitting involved, it’s important for the company to have site control,” Lisak said. If Magnetation decides to go elsewhere, Lisak said, the county would regain control of the site according to the terms of the option agreement.

The county’s Land and Development Committee and Douglas County Board could hold special meetings to weigh the option agreement for Magnetation next week.

The Douglas County Board met in closed session last week to discuss the project, said Chairman Doug Finn, who said the county’s role is to make the land available for Magnetation. Last week, the board also authorized Finn before the closed session to call a special meeting if needed.

The city’s Redevelopment Authority is also slated to hold a public hearing at 2 p.m. Feb. 3 before making a blight determination, a first step that would allow development of the site.

“Magnetation is one of the targeted industries for that site,” Lisak said. “There was a lot of work that was done in the past and when this one stepped forward — Magnetation looking for a site for a pellet plant — our team approached Magnetation and asked if they’d be interested in Parkland.”

Three years ago, with the help of federal funding secured by retired Congressman Dave Obey, the county evaluated the site on County Highway Z west of County Highway E for development of the industrial park with the goal of being ready when business came along. The site evaluation included wetland delineation, a study of the environmental background of the site and an engineering study to determine infrastructure needs. It also identified potential industries for the site.

During that process, Lisak said a buffer was created to protect Bear Creek, and a conservation easement was created to manage wetland mitigation.

Matt Lehtinen, president of the Nashwauk-based company said Thursday the company will narrow the choices to two sites within six months and then apply for state permits at both sites at the same time, at some point later choosing where to build the plant.

Serck said there have been discussions already with the Wisconsin Department of Natural Resources.

“It’s a manufacturing operation,” Serck said. “They reclaim old tailings, make a powder — it’s a concentrate — and make taconite pellets from it.”

According to a fact sheet produced by Magnetation, the pellets are designed to meet the metallurgical properties customers’ require, and are made using iron oxide, limestone, dolomite, binders, electricity and natural gas, using the latest technology. Serck said it would be a very clean process and there is no mining involved.

The iron oxide would be brought in from northeastern Minnesota, dolomite and limestone would come from Upper Michigan, and bentonite from Wyoming, will be brought to the site by lake vessels, rail cars and trucks.

Lisak said that is one of the advantages of the Parkland site, which is accessible by rail, near U.S. Highways 2/53 and has port facilities nearby.

Company officials have said the decision will be based on available locations, cost and the speed in which permits can be approved.

“Permitting will be a process,” Lisak said. “And this will allow them — if the Land and Development Committee recommends it, and the County Board approves it — this gives the company the ability to go ahead with the permitting process and allows us to stay in the competition for this.”

Duluth News Tribune staff writer John Myers contributed to this report.

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