Tax-subsidized Minnesota mining company considers expanding elsewhere

Tax-subsidized Minnesota mining company considers expanding elsewhere
Magnetation says Minnesota's environmental laws are too strict.

Magnetation, a Nashwauk, Minnesota-based mining company, is kind of like the ungrateful date you spend too much money on, only to see him/her spurn you for another lover.

In 2008, the company received a $1 million grant from the Minnesota Department of Employment and Economic Development, money that helped the company establish its operation throughout the Iron Range area of Northern Minnesota.

But the Duluth News Tribune reports that the company is now considering building its job-creating iron ore pelletizing plant in another state, news that has left Minnesota lawmakers royally pissed.

Representative Tom Rukavina, D-Virginia, told the Tribune, "To me, it's embarrassing that a guy who got $1 million of free taxpayer money from Minnesota would even consider going to another state." His comments were directed toward Larry Lehtinen, CEO of Magnetation.

Rukavina calls Megnetation's possible expansion out of MN "embarassing" and "greedy."
Rukavina calls Megnetation's possible expansion out of MN "embarassing" and "greedy."

"For him to threaten the state after what we've done to get him going, that's just plain greedy," Rukavina added.

Rukavina's sentiments were echoed by echoed by St. Louis County Commissioner Keith Nelson, who said he's "not pleased at [the possibility of] seeing those jobs go somewhere else."

Lehtinen, for his part, argues that Minnesota's environmental regulations -- particularly the state's ban on new mercury emissions unless a company can reduce emissions elsewhere and the state's sulfate emission limit -- involve too much red tape and make the process of trying to build a $350 million iron ore pelletizing plant here prohibitively costly. 

The raw pellets can simply be extracted from Minnesota soil, shipped to another state with more lenient regulations and then processed. With that in mind, the company is now considering sites in Wisconsin, Indiana, and Illinois.

Lehtinen is meeting today with top Minnesota Pollution Control Agency and DNR regulations. Comments from a PCA manager suggest the state will bend over backwards to entice Magnetation to stay in the Iron Range. The plant would create about 150 jobs in an economically depressed part of the state that can use all the investment it can get.

And ff they don't build here? Then, Rukavina suggested, it'll be time for lawmakers to start playing rough.

"I can't stop international or interstate trade," Rukavina told the Tribune, "but nothing says we can't tax the natural resources that someone is taking out of our state to create jobs in another state."  

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