Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
The Minnesota Department of Revenue released a report that shows that the industry in the midwestern U.S. state paid 11% fewer taxes in 2017 compared to the year before.
According to the government office, the lower figure reflects the smaller amount of iron ore produced during 2016. Taconite-pellet plants and ore-concentrating firms produced 29 million tonnes last year, down from 33 million tonnes in 2015, which was down from 40 million tonnes in 2014.
The output reduction is the result of a global industry downturn and pricing pressures that left seven Minnesota ore-processing facilities either in a temporary stoppage or completely shut in 2015 or 2016.
The 2017 forecast is more positive, though, as growing demand from Canada, China and Japan has allowed for the reopening of Keetac, Minntac, United Taconite and Northshore Mining. At the same time, the Star Tribune reports that investment firm ERP Iron Ore has plans to bring the once-bankrupt Magnetation back online in Grand Rapids, Minn., and Reynolds, Ind.
In real numbers, 2016 iron ore taxes in Minnesota totaled $96.5 million, of which some $38 million went to the Iron Range Resources & Rehabilitation Board.
