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Third of taconite shipped from Duluth leaving US

Taconite pellets are conveyed into large mounds near the CN ore docks in 2014. (Bob King / Forum News Service)

DULUTH — More than a third of the iron ore shipped out of the Twin Ports so far this year has left the country.

The Duluth-Superior Port Authority reported that through July about 35 percent of all taconite shipments have been taken to Quebec, and spokeswoman Adele Yorde says that is "primarily for export" elsewhere. Typically about 30 percent of taconite shipped locally is bound for Canada.

"Much of that rise is attributable to a surge in U.S. iron ore exports from Minnesota mines to steelmakers in China and Japan," the port wrote in its summer magazine.

It seems U.S. Steel has found customers there for its Keetac mine and processing center, which restarted earlier this year after a shutdown in May 2015.

The company announced in December the plant, which can produce 6 million tons of taconite a year, would reopen after it "reached agreements to supply iron ore pellets to third-party customers. U.S. Steel will adjust its iron ore pellet production in order to take full advantage of these business opportunities."

In an earnings release last month, U.S. Steel said: "We have entered into iron ore pellet supply agreements with both North American and international customers, under various terms and conditions."

CEO David Burritt did not elaborate on these customers or sales when asked by investors during a conference call in July.

The Pittsburgh-based company told Forum News Service: "Outside of the agreement with our former Canadian operations, we do not discuss our commercial relationships related to other third-party pellet sales."

The state Department of Employment and Economic Development said last week that ore, slag and ash exports from Minnesota had quadrupled to $112 million in April through June of this year compared to the same quarter in 2016. DEED said the rise was "driven by major increases in sales to Canada and Japan."

Cleveland-Cliffs Inc., the largest taconite producer in the country, said it operates on long-term agreements with mostly domestic and Canadian customers, with some of its ore traveling to Trinidad and Tobago.

"Our core strategy is really focused on the North American steel market," said Cliffs spokeswoman Patricia Persico.

Kelsey Johnson, president of the Iron Mining Association of Minnesota, said international shipments could increase should shipping costs come down.

"Canada is one of our larger export customers," she said. "Because we have a unique market, the Soo Locks has helped us maintain our market share there."

Wherever the ore goes, new customers for U.S. Steel has meant more production and more work for the Iron Range and at the ports this year.

"We've had a lot of Canadian traffic in the Two Harbors dock to load, too," Yorde said. "Iron ore in total is about 20 percent ahead of the five-year average."

Brooks Johnson

Brooks covers business and the economy for the Duluth News Tribune.

(218) 723-5329
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