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CATHERINE WINTER: You're listening to a special Mainstreet Radio broadcast coming to you live from city hall in Nashwauk. There are a couple of dozen people here in Nashwauk historical city hall building. And I'm Catherine Winter here with Martin Kaste.

If you look out over some of the enormous pits and mountains on the Mesabi Range, it's astounding to think that that much rock was moved without modern machines. The first mines were worked by people and horses and then by steam engines. Today, mining operations are much more high tech. Mainstreet Radio reporter Rachel Reabe visited one of the seven mines on the Range and prepared this report.

SPEAKER 1: 10, 9, 8, 7, 6, 5, 4, 3, 2, 1. Fire.

[EXPLOSION]

RACHEL REABE: 600,000 tons of taconite have just been exploded, kicking up a bank of black smoke that stretches high into the winter sky. The simultaneous detonation of 150 explosive packed holes has turned this field of solid rock into a stretch of rock chunks, the first step in the arduous process of mining iron ore.

The blasts are a weekly occurrence at Hibbing Taconite, the second largest mine on Minnesota's iron range, with 950 employees. To keep the grinding mills working at capacity, workers labor around the clock every day of the year to produce 8 million tons of taconite pellets annually.

The landscape surrounding the sprawling plant buildings at Hibbing Taconite is rugged and marked with rock ledges of varying heights. The elevations change rapidly as the rock is systematically blasted and then hauled away. The huge 240-ton trucks with 12-foot tires that carry off the rock chunks to the grinders belch black smoke as they labor up and down the rough gravel roads. Steve Zeitler of Hibbing Taconite stands at the base of one of the six mountains of ore currently being mined at the 30,000-acre facility.

STEVE ZEITLER: We are below a couple of benches of taconite that have already been removed. They're about 50-feet high. And that shovel with its 18-yard dipper will fill these haulage trucks in about seven passes.

RACHEL REABE: After 100 years of mining, there is still an abundance of ore available in Northeastern Minnesota. Hibbing Taconite geologist Henry Djerlev says that while the demand for taconite has declined in the last dozen years, the supply on the Iron Range remains strong.

HENRY DJERLEV: There's enough aura here at the grades that we would need to operate for the next 300 years. It is one of the largest deposits of iron ore in the world, and we'll probably continue to be that.

RACHEL REABE: The iron that was deposited 2 billion years ago in Minnesota was thought to have precipitated out of the shallow seas that covered the area. It's concentrated in a band about 1 mile and 1/2 wide and just over 100 miles long in Northeastern Minnesota. Djerlev says their job is to separate the iron from the rockets trapped in.

HENRY DJERLEV: Let me get a magnet out. You can see what looks like some light green bands and some grayish to almost black bands. This is the material we're after. That's magnetite. And magnetite is the iron mineral that is magnetic. And this is the 30%, if we're lucky. And that's the waste material. That's the 70%

RACHEL REABE: These rocks need to be crushed to powder fineness in order to separate the magnetic particles from the waste material. It happens in two stages. First, the rocks are loaded into a crusher where they're broken into 10-inch chunks. Then they move into one of the grinding mills, where the ore will reduce itself to powder.

Water is added to the process so the ore can be transported in slurry form to magnetic separators where iron-bearing particles are separated from the waste. Ramona Pajunen oversees the cavernous, dimly lit second story of the plant, where the magnetic particles, averaging 67% iron, are snapped off filters.

RAMONA PAJUNEN: I work on the equipment. I replace worn-out bags, the filter bags. When they wear out, I have to take them off. And then I have to sew the new ones back on. My husband works out here and then got a brother-in-law and my husband's cousins and his second cousins. So there's quite a few family here.

RACHEL REABE: Pajunen, one of about 50 women employed in so-called non-typical jobs at the Hibbing plant, has worked here 18 years. She says she gets tired of the dirt and dust of her work environment, but it's the best paying job she can get with a high school education. Mining jobs are still the highest paying industry jobs in the state of Minnesota, averaging over $36,000 annually per worker.

Hibbing Taconite's 24-hour a day operating schedule, produces about 24,000 tons of taconite pellets that are loaded twice a day onto trains bound for Lake Superior. The 1/2-inch pellets are formed when the magnetic particles are mixed with clay. The process is so computerized, the sprawling plant seems almost deserted even on a weekday.

On this floor, where the pellets tumble down conveyor belts on their way to the furnace, the only person around is a maintenance mechanic checking on one of the machines. Steve Zeitler says the process is monitored by computers.

STEVE ZEITLER: That's the tons per hour coming off of this balling drum. And this is the gallons per minute of water addition. And those are all-- that's an automated process that controls these. These are the readouts for that.

RACHEL REABE: There are currently 5,900 people employed in Minnesota's iron mines, a sharp drop from the 15,000 that worked there a dozen years ago. Despite the 60% reduction in workers, taconite production dropped only slightly, from 45 million tons annually to 40 tons. Duluth economist Jerrold Peterson attributes the jump in productivity to improved equipment and a more efficient workforce.

JERROLD PETERSON: We in a short period of time of a decade doubled the average productivity per miner. If productivity continues to grow, we'll probably see employment in that industry continuing to decline, a loss of additional maybe-- almost an additional 1,200, 1,300 jobs by the year, let's say, 2003 in the next decade.

RACHEL REABE: But the increased productivity also means Minnesota producers were able to hold down their costs. Steve Zeitler at Hibbing Taconite says reasonably priced pellets have helped them stay competitive on the world market.

STEVE ZEITLER: If we don't make a good pellet at an acceptable price, we're not going to be able to sell it, and the steelmakers will acquire it elsewhere. That's the bottom line.

RACHEL REABE: Experts predict that by the year 2000, dwindling steel consumption will reduce the world market for iron ore by 10 million tons annually. The mining industry in Minnesota hopes their seven plants will be efficient and competitive enough to stay in business. I'm Rachel Reabe, Mainstreet Radio in Hibbing.

MARTIN KASTE: There's a lot of iron ore left in Northeastern Minnesota, but economics may price it out of the world market. For the short-term, experts say most Minnesota plants are competitive. And there's a chance new jobs may be created as the steel industry changes. But many experts believe the best the mining industry can hope for is to maintain employment at its current level. Mainstreet Radio reporter Mark Steil has that story.

MARK STEIL: Minnesota iron production is under pressure as never before, from foreign competition and a changing US steel industry. The Iron Range has remained competitive by cutting production costs and doubling worker productivity over the last decade. Rod Bleifuss has helped in that effort. He directs the University of Minnesota's Mineral Research Laboratory in Coleraine, which has come up with ways to cut taconite production costs.

ROD BLEIFUSS: We keep talking about this being a dinosaur industry and it's dying and all of that. Get into it and look at it in detail, see what's going on in these various plants, and you'll find some of the most sophisticated technology out there is being applied on the plants on the Range. This is not a backward industry, and it's not a dying industry.

MARK STEIL: Still, the end may be in sight. Easily accessible taconite may be gone in a few decades.

ROD BLEIFUSS: We're looking at certainly a lifetime expectancy of 40 years or so at the present rate of exploitation and how that goes really depends on what kind of technology develops over the next 10 or 20 years and how fast we exploit it.

MARK STEIL: Even with technological improvements, though, foreign competitors like Venezuela, Brazil, and Canada are a major threat. One big reason Minnesota taconite companies have been able to stay in business are the Great Lakes. Bleifuss says this transportation advantage allows them to beat foreign competition most of the time in delivering iron pellets to steel mills near the lakes.

ROD BLEIFUSS: We can easily be competitive down at the lower lake ports like Cleveland and Gary and Chicago and places like that. Beyond that, we moved to the Eastern seaboard or any of the other steelmaking facilities. They can be serviced more economically by overseas pellets, and we can't meet that kind of competition. At the present time, an overseas pellet can almost compete in the Chicago area. And that's a break even deal right now.

MARK STEIL: Minnesota's dependence on Great Lakes mills is hurt by dramatic changes in the nation's steel industry. 20 years ago, US companies had too many outdated blast furnaces, too many workers, and too many managers. Michigan State University Professor Peter Kakela says by trimming employment and improving blast furnace efficiency, US steel companies, once again, are competitive on the world market.

But the gain had a price. The industry's downsizing allowed a new type of steel company to gain a major part of the market, with important implications for Minnesota's Iron Range. The new steel companies use electric arc furnaces known as mini mills to melt scrap instead of Minnesota iron into a variety of steel products. Mini mills currently produce a third of the nation's steel and could produce half by the turn of the century. Kakela says they've been able to gain market share by developing new technology to improve the quality of their product.

PETER KAKELA: It allows the mini mills to make a sheet steel that's of a higher quality so that they are starting to encroach on the appliance market and the automobile market. Those are big, higher quality markets for steel.

MARK STEIL: This type of steel cannot be made using only scrap metal. It's not pure enough. That presents an opportunity for Minnesota's Iron Range to make high-quality steel mini mill supplement melted scrap with nearly pure iron. Right now the iron comes from overseas producers, but many believe it can be made on Minnesota's Iron Range.

Charlotte-based Nucor corporation is the leader of the mini mill revolution. Nucor has built a plant in Trinidad to produce high-grade iron known as Direct Reduced Iron or DRI to sweeten scrap steel. Nucor President John Correnti says his company needs much more iron than the Trinidad plant can produce and says one source may be Minnesota.

JOHN CORRENTI: We're talking to a couple of different people up there. One of them we're in conversations now with Cyprus Northshore for the possibility of doing a joint venture with ourselves and them in a couple of other steel companies.

MARK STEIL: Correnti says the idea is to refine taconite to a product containing 90% iron compared to 65% iron in Minnesota's traditional taconite pellet. Cyprus Northshore reopened the old reserve mining facility in Silver Bay four years ago. Mike Rounds is media relations manager for Cyprus' parent company in Denver, Cyprus Amax Mineral Company. Rounds says the company has most of the necessary state permits to produce DRI. He says what's lacking is approval by the parent company to fund a new plant.

MIKE ROUNDS: We're still in the fairly early stages of this whole idea. It's a long ways from fruition, although up to now, it has appeared to be promising.

MARK STEIL: Even if a DRI plant comes to Minnesota, though, it won't be an Iron Range savior. Steel analysts. Peter Kakela says, at best, it's another sign of the decreasing importance of Minnesota's iron ore. That's because DRI makes up only 10% or 20% of each ton of high-quality steel produced by mini mills. The rest is scrap steel substituted for traditional iron pellets like those produced in Minnesota.

PETER KAKELA: The more there's a demand for this direct reduced ore, it really means that there is less demand for the conventional ore. And it's not a 1 to 1 trade-off. It's about 1 ton of direct reduced iron ore means about 5 tons of conventional or not needed.

MARK STEIL: Kakela says that trade-off means DRI at best can replace some jobs lost in the traditional pellet industry, but not all of them. He says it's possible one or two Iron Range plants will close before the century ends because of reduced pellet demand. But even with that scenario, Kakela says Minnesota iron ore is not a dying industry.

PETER KAKELA: We're still talking 50-plus million tons of ore being produced in this country, and 3/4 of that is in Minnesota. So that's still a large, large volume.

MARK STEIL: There's still a possibility, too, that there could be other types of mining on the range to replace jobs lost in the iron ore industry. An Arizona company, Arimetco, is actively exploring the possibility of opening a copper nickel mine in Northeast Minnesota. A company official says its early research is promising, but says Arimetco is a long way from opening an operation.

That sort of talk has been heard before in Northeast Minnesota with copper nickel and also other minerals ranging from gold to titanium. Still, many mining officials believe there will come a time when it becomes economically possible to open up new mining operations on the Iron Range.

This is Mark Steil, Mainstreet Radio.

MARTIN KASTE: You're listening to a special Mainstreet Radio broadcast live from Nashwauk. I'm Martin Kaste here with Catherine Winter.

CATHERINE WINTER: We're broadcasting today from Nashwauk's historic city hall, a beautiful building with hardwood floors throughout and beautiful woodwork. There are about two dozen people here sitting, watching our program. And joining us now are Doug Schrader, president of the Iron Mining Association of Minnesota; and Bob Rootes, who's a lobbyist for the United Steelworkers.

Thanks to both of you for coming. Let's first start by going to our panelists. And let me ask the two of you, our new panelist, Doug Schrader and Bob Rootes, I wonder, having talked with a lot of people who work at national steel or worked at national steel who are confident that the plant will open again, are iron rangers unreasonably optimistic that a boom is always going to come after a bust? Do you think-- do you think that the region is making a comeback? One--

DOUG SCHRADER: This Doug Schrader. I think one of the important things, as I've listened to the discussion today that needs to be spelled out, by no means has the integrated steel industry abandoned the taconite pellet and by no means are any of the existing companies that are on the Range and operating to date have plans to abandon their production.

As a matter of fact, all the plans that I'm aware of are for doing everything they can to garner capital, to improve the quality of those pellets, and to reduce the cost of the pellet. So while there has been discussion about an overabundance of pellets in North America, by no means would this supposed 10 million ton surplus have to come out of the state of Minnesota.

You could force closure of Canadian operations or even possibly Michigan operations. So that's the approach that we've taken.

CATHERINE WINTER: Is that the likely scenario, though? Aren't Michigan operations, for instance, taxed much less than Minnesota operations?

DOUG SCHRADER: Yes, they are. But there are many factors that go into the cost component of a pellet in the production and its competitiveness in the international marketplace and why we may have a big cost disadvantage in the area of taxes. Currently, there are a lot of other factors that come into play. And there are a lot of advantages that I think we do have here in Minnesota that maybe the Canadians and Michigan operations might not have.

BOB ROOTES: I'd like to respond to that if I could.

CATHERINE WINTER: Bob Rootes.

BOB ROOTES: Yeah, you mentioned-- and this goes to some of the discussion I heard earlier about the IRRRB and the type of projects they invest in. The tax rate in Michigan is lower, and it's a travesty what happened on the Upper Peninsula of Michigan. If you travel there and take a look at the infrastructure in the towns and the cities of Upper Michigan, there is none.

The industry took the minerals out of that ground. And they didn't have a system like the IRRRB and legislators like the Perpiches and Rukavina and Joe Begich to make the mining industry leave something behind. And we can be proud of the infrastructure that's here on the Iron Range. And whenever that comes up, that's a real sore point.

CATHERINE WINTER: Bob Rootes, I wanted to ask you too, I have heard the accusation leveled that the reason Minnesota plants are too expensive or not competitive is because of the strong labor history here. Is there any truth to that?

BOB ROOTES: Well, actually, that's a fallacy. The taconite industry is not a labor-intensive industry. Labor is a very small cost of producing a ton of pellets. Hibbing Taconite, for example, the average is about 5 tons per man hour worked. In the steel industry itself, steelmaking process, they talk tons of-- I mean man hours per ton of steel.

In this industry, we actually produce 5 tons for every man hour worked. It's not a labor intensive. If you cut the cost of labor by $1 an hour, you only affect the price of a ton of pellets by $0.20. And on a $250 per ton finished product to steel, your impact is only $0.30. Labor is not the major component. Energy, materials, transportation are the major components.

CATHERINE WINTER: Hmm, do you agree, Doug Schrader?

DOUG SCHRADER: Well, I think there's no question that there's been a lot overstated about the negative relations that supposedly exist on the Range with the steelworkers. And it has not been my experience in the last two years that that's been an impediment. Quite to the contrary, I think we've seen a major change. And it's been a major initiative of mine to open up and work with organizations like the IRRRB to open up and welcome participation of our employees, the United Steelworkers.

And my experience has been very positive in that regard. I think there are lots of good examples around the United States where organized labor, whether it be the United Steelworkers or Autoworkers or other unions, have recognized the fact that manufacturing and, in this case, the iron ore industry, has to compete in the international marketplace.

And they are doing things to address that, to change the traditional confrontational type work rules and negotiations that had taken place in the past. And quite frankly, I think we're working very proactively with the United Steelworkers, and I'm very happy about the prospects for the years to come.

MARTIN KASTE: Mainstreet reporter Rachel Reabe has gone into our audience here in Nashwauk and has a microphone now with one of the people listening. I have Wayne Impila with me. He is a Nashwauk resident and has spent 20 years in the mines with Butler and more recently with National. He has been concerned with some of the information that's been presented by the panel today. Wayne, why don't you respond to that?

AUDIENCE: Well, I want to direct to a response from Director Gustafson. I was a proud employee of Butler Tech for 11 years upon closure. And contrary to what you said-- I mean, you have your right to your opinion. But it was the most productive plant on the Range. It was a pride of the Range.

And it didn't close because of productivity or it wasn't competitive anymore. It closed because of a bankruptcy of one of the partners and another one of the partners who was Inland Steel and North of Virginia had its own plant. And a mining company wanted to run that property. So I just wanted to clarify that it was a productive plant. And economics with other companies is why that plant closed.

CATHERINE WINTER: Well, Bob, let me ask you, do you think there is a sort of a blame the worker mentality in the problems that the Range is facing?

BOB ROOTES: Well, I don't really think so. I don't think that's true. In any situation, you look at what's happening. And you look at the players who are involved. And there's blame to go around on everybody. By the way, I want to make a comment on what was just said from the audience. That's absolutely true, that that was not a decision made on economics here. That was made on an Eastern decision, again, that affected the workers on the Range.

CATHERINE WINTER: Well, maybe what we should do is let Jim Gustafson clarifies. That what you meant, commissioner?

JIM GUSTAFSON: Well, Catherine, I didn't mention Butler taconite plant in any of my presentations. I did make reference to the fact that we had two high-cost producers, National Steel and Eveleth Taconite. And it wasn't necessarily directed towards the workforce there. They were both-- it's well known that they were the two high-cost producers.

The fact is that both of those plants have made giant strides in reducing their costs. Unfortunately, as I mentioned, National is now closed down. And we hope to see it reconstituted, but--

AUDIENCE: Beg to differ that it's closed, Director Gustafson.

CATHERINE WINTER: This is Wayne--

AUDIENCE: The Keewatin plant is not closed, sir. It is idled. And we will be speaking with the company on February 1. I don't know if you're aware of this. But the plant is not closed, sir. It's idled.

CATHERINE WINTER: There is a news item out today that there will be discussions going on again between that plant and its workers. And so there is still the question of whether it will open again. And there have been company officials who have suggested that the closure is permanent, however. So it remains to be seen-- remains to be seen what will happen with National.

JIM GUSTAFSON: He's correct. It's technically on idle.

CATHERINE WINTER: Commissioner Gustafson.

TOM RUKAVINA: Catherine, Representative Rukavina, speaking to what Wayne Impila just said, it's true. It isn't technically closed. And I think that we are going to all work very, very hard, Wayne, to see that we can do anything possible to try to keep that plant open.

And I don't often defend Jim Gustafson, but I will in this case say that I know that he is working also very hard presently to see that something can happen there. And we know that Dave Foster, District 33, Steelworker director and Senator Janezich just returned from Japan. And I guess they'll-- I said they were cautiously optimistic. So perhaps something can happen soon. And we haven't given up hope, Mr. Impila.

AUDIENCE: Thank you, Tom.

MARTIN KASTE: Doug Schrader from the IMA, the Iron Mining Association of America. How realistic in the case of National Steel, is the hope, perhaps, of it reopening as a direct reduced iron technology, as we mentioned in the piece earlier? Is that still a possibility?

DOUG SCHRADER: To be quite frank, Martin, I have not participated in any of those discussions, and I think it'd be ill advised on my part to comment on that. The only thing I would like to say on the whole discussion about DRI, yes, I think there is an opportunity to participate in that marketplace, which the Iron Range currently is not participating in.

The only concern that I have in that-- and I think we should go forward and explore every opportunity that we have to develop a new industry here and to diversify somewhat from the traditional taconite pellet. But the only concern that I have in that is that we forget our backbone of our industry.

And like I said earlier, this industry is going to be around for a long time. You would have to ask yourself, why are the taconite companies investing over $80 million just in this year coming to improve their facilities? And why are there millions of dollars in research being spent to improve the quality of the pellet?

And that's a great hurdle that I think from a public perception that we're concerned about, that we don't want people to turn their back on the existing industry at the expense of a hope for a new industry. Even at best, all the predictions I've heard are talking about a potential for maybe 5 to 6 million tons of DRI. Well, that's a far cry from what we're at now, at 40 million tons of pellets. So I don't want the attention to be diverted there.

And just one other comment on that, Mr. Garvey, who is the president of North Star Steel, has visited the Range several times in the last year and has spoke very aggressively about the encroachment of the mini mills into the traditional marketplace of the integrated producer. And that's flat product steel. And I'm here to tell you-- and I used to be a melter foreman at one of the BOF shops in East Chicago at Inland.

I'm here to tell you that encroachment as they swept through the low end of the steel business is true. But when you talk about getting into the flat products business, I don't think you're going to see the rapid takeover of that marketplace that people like Mr. Garvey would want us to believe.

And keep in mind that the integrated producers are not sitting still. They are working their tails off to improve their technology to make higher grades and higher qualities of steel to satisfy a marketplace that's traditionally been-- there's the auto and the appliance industry that the electric arc furnace makers are a long ways away from capturing. Plus, they plan on going back and trying to recapture some of the marketplace that they lost in the low end of the business. So it's not a hopeless case by any means for the taconite pellet.

CATHERINE WINTER: All right. I don't mean to interrupt you. We have some callers on the line who've been patiently waiting to get their questions in. Go ahead. What's your question, please, or comment? Do we have a caller still there?

AUDIENCE: Talking to me?

CATHERINE WINTER: Yep, I am.

AUDIENCE: I'm from Virginia. And I am a pro ranger. My first question to anybody on the panel is, how about reducing the inflammatory rhetoric and the behavior of politicians, union leaders, and their followers against their own companies and against businesses in general?

Isn't a better business climate up here in Northeastern Minnesota crucial to maintaining current taconite plants, building the new high-tech plants which have redesigned pellets for DRI, and as well as encouraging CEOs of established companies to build satellite plants here rather than elsewhere? That's the first question. Can I give you the second?

CATHERINE WINTER: If you have a second, go ahead.

AUDIENCE: Second question, how about the increasing tendency in some circles to dumb down range students with OBE, Outcome-Based Education, AB and not ready yet, and the rather mediocre science, math programs up here and inflated grades and SAT scores which may be somewhat better than in other states but are still low, especially in science and math? How about returning to the old days when excellence in academics was admired like excellence in sports? Isn't that going to help maintaining the mining industry and attracting satellite plants of established companies that won't--

CATHERINE WINTER: All right, let's see if we can ask our panelists to respond. First off--

TOM RUKAVINA: Catherine, can I take that one? This is--

CATHERINE WINTER: That's Tom Rukavina.

TOM RUKAVINA: --Tom Rukavina. Sir, first of all, let me comment on your inflammatory rhetoric. Because in the last three years, I would say, at the state legislature, it's been steelworkers who have come down and who have made a big difference in reducing taxes and reducing electrical costs, transportation costs for the mining industry, realizing that if they don't make a profit, these steelworkers don't have a job.

And I think the steelworkers have gotten a bad rap for that. They're a very small part of the formula as far as the expense of the cost of the total pellet. And in fact, if I'm not mistaken, and Mr. Rootes can correct me, I think a lot of the steelworkers on the Range are just up to wages now in the last contract that they were making a decade ago. Am I not correct, Bob? Because they've given up up to $2 an hour in helping out their companies.

But the 15-- there was an article, Catherine, in the Minneapolis Tribune on Monday talking about the iron mining industry, said that they approve of the capital improvements tax we're getting. We're giving 15 and 1/2 cents of our production tax back to the industry if they invest it up here. And it was the steelworkers that got that and the Iron Range delegation that got that credit for those companies.

The energy program, the SIP program that can help the taconite industry save a lot of costs in power and energy costs, it was the-- unfortunately, this whole thing was led by people from National Steel. The steelworkers from National Steel led the charge to help their company. And now we see what's happened. But it was those folks that came down and got a lot of these programs. The Iron Range delegation, contrary to what's being anti-mining, gave a $2 million grant program to each mining company so that they would invest back up here and invest and keep their plants competitive.

Sir, as far as OBE education, this program isn't about that. But just let me say that, kids today maybe-- and I can remember my dad and mother lamenting about some of the things I did. And every generation says that. But by and large, our kids up here are great kids. And I think they're hard students. They study hard, and they do good. And I think if you compare today what they're doing with what you and others did, your predecessors here that were just as intelligent and work just as hard in the schools.

CATHERINE WINTER: Well, I'd like to ask-- this is clearly an emotional issue. It gets people very stirred up and especially recently with the idling of the National steel plant-- what's going to happen to the people who have been thrown out of work? What's being done to try to-- in case that plant never opens again, where will those people go, and what will they do? Bob Rootes, maybe you can tell us. Are the steelworkers doing something to try to help their own?

BOB ROOTES: Well, at this point, what the steelworkers are doing is working very hard to get the plant reopened. The amount of-- it's an incredible amount of paperwork still going and meetings going on between Pittsburgh, Mishawaka, and the Range.

I don't think that any point we've looked at this as a closed facility. We're looking at this as a facility where, unfortunately, a decision was made to lock out 600 employees. And at this time, we're looking at that they're going back to work in some capacity.

We do have many programs in this state thanks to the efforts of the Range delegation. And the unions in this state has a tremendous dislocated worker program. But we're not looking at these people as dislocated workers now. We're looking at them as people who are going to go back to work.

TOM RUKAVINA: As I mentioned, Catherine--

CATHERINE WINTER: Tom Rukavina.

TOM RUKAVINA: --last year, 140 people got laid off. I believe it was 140 from Eveleth mines. I see one of their executives in the audience. And I understand in talking to some of the people at jobs and training that a significant number of those folks have found jobs at other taconite plants. Minntac at US Steel has been doing some hiring. LTV over in Aurora, White Lakes has done hiring. I don't know if Hib Tac has--

BOB ROOTES: Yes, sir.

TOM RUKAVINA: Bob is indicating yes also that Hib Tac, as they've increased their production somewhat, they've hired some of these laid-off miners. And that's very, very good. And we're glad that they're doing that.

MARTIN KASTE: Well, this is a large and complicated and emotional issue, as Catherine has mentioned. We'd like to move on before our time runs out to another issue concerning the mines, the question of the environmental impact of the entire industry here.

The quest for iron ore forever changed the landscape of Northeastern Minnesota. And as the mines grew deeper and wider, huge, red-sided hills grew up where once there had been flat ground. This altered landscape has admirers, however. Peter Leschak is a writer and a native of Chisholm in the heart of the Iron Range. In this excerpt from his book, Bumming with the Furies, Leschak tells of leaving Chisholm For college and his first look at home from a distance.

PETER LESCHAK: "It was 1970, the year of Earth Day and the nativity of a widespread environmental consciousness. I was fired with the zeal of a crusader and possessed that clarity of vision, that sure awareness of right and wrong characteristic of zealots. I had no doubt what pollution was, and the battle lines were drawn in black and white.

There were reams of new literature available on the subject of ecological damage, and one of the booklets I found was a depressing little survey entitled Our Polluted Planet. It was profusely illustrated with photos of environmental nightmares-- oil spills, smog and shrouded cities, putrid rivers. These were typical examples, and I leafed through the booklet quickly until I came to a particular photo.

It purported to display a raped, ravaged landscape. And I recognized it immediately. It was the hull rust mine in Hibbing, only a few miles from my hometown. I was shocked. The mines were pollution? Why, I thought they were beautiful. Red and maroon mountains and gorges that had been playgrounds for my friends and me, vast arenas for childhood games and fantasies. Yet, the pamphleteers considered them disaster areas. How could that be?"

MARTIN KASTE: Writer Peter Leschak reading from Bumming with the Furies.

CATHERINE WINTER: 100 years of mining, 5 billion tons of ore taken from the ground on Minnesota's three iron ranges-- the Vermilion, the Cuyuna, and the Mesabi. The Mesabi Range is a 90-mile spread of man-made mountains and canyons and lakes. Mining built cities and schools and provided thousands of jobs to the Range. But what has been the environmental price of prosperity? Leif Enger reports.

LEIF ENGER: 50 miles up the shore from Duluth. Lake Superior breakers sweep steadily against icy rocks just south of Silver Bay. It's snowing hard, and the snow mixes with steam rising from the lake and with heavy steam coming off the Cyprus Minerals' taconite plant at the water's edge. The plant used to be owned by Reserve Mining. And it flanks what's still the most obvious environmental miscalculation committed by the taconite industry in Minnesota.

Climb to a high place along the rugged shore, and you'll see the wide brown delta of taconite waste reaching out into Superior. Duluth teacher and environmentalist Alden Lind.

ALDEN LIND: I was 12 years old. And I can still remember the original request in 1947 by Reserve Mining Company to the state of Minnesota for permits to allow the dumping of the tailings into Lake Superior. I remember my father, in particular, being very troubled at that time.

LEIF ENGER: Lind's family has been in the resort business on the North Shore since the early 1940s. No one knew what the dangers were when Reserve began dumping into the lake in 1953. No one knew that the vein of taconite mined by Reserve held microscopic asbestos-like fibers dangerous to life both in water and on land. For years, Reserve poured waste rock into the waters of Silver Bay at the rate of 67,000 tons per day. A peninsula of tailings rose and spread. Lind recalls the day a neighbor and fellow resorter approached his parents to organize against Reserve.

ALDEN LIND: And Milton said, something's got to be done, that people's tropical fish are dying, the goldfish are dying, birch trees around East Beaver Bay and-- between East beaver Bay and Silver Bay are dying, and there are these clouds of green water in the lake. And somebody's got to do something to stop their dumping into Lake Superior.

LEIF ENGER: By the time the dumping did stop, years and millions of dollars in court costs later, Reserve Mining had become an object lesson for American industry. When it went out of business, it left a legacy of hazardous tailings intact in the lake and questions about what should be done when a company can't pay for the damage it does.

At US Steel's Minntac operation in Mountain Iron, the biggest taconite plant in North America, wet taconite tailings dropped from an overhead conveyor into the bed of a truck the size of a two-story house. The tailings are dark gray, ground fine as flour. From here, they'll be trucked 1/2 mile to Minntac's disposal basin, essentially, a man-made lake covering 14 square miles. Minntac workers are quick to point out that these tailings are free of the asbestos-like material that made Reserve's waste so hazardous.

Reserve mined an isolated vein of ore believed to be unique in containing the dangerous fibers. Most of the ore on the Mesabi Range, says Brian Dahlin, is benign by comparison.

SPEAKER 2: The rock itself is chemically very clean. It's not like a gold mine or a lead sulfide mine where you're taking large amounts of rock and then have the danger of getting large chemical contaminants from it. I think it's just amazing that, here, we grind up about 50 million tons to flour. And yet, there's no adverse chemicals released in that operation.

LEIF ENGER: Dahlin is an instructor in a new employee education program started by Minntac called CITE, or Continuous Improvement to Environment. The program takes individual responsibility as its premise. The idea that if everyone is willing to report oil spills or to properly recycle old rags and cardboard cartons, the company itself will run more efficiently and with a stringent environmental conscience.

Jane Kingston is an environmental engineer at Minntac. Pete Burtless, a 17-year employee who's been through the three-day program.

JANE KINGSTON: Typically, to begin with, environmental concerns, of course, were not even part of the plan. Now they have been imposed in some cases. Some of the rules and regulations force it so that-- maybe, initially, companies were kicking and screaming and going along with things. And the significant change here at Minntac is getting into the proactive mindset rather than putting out fires and reacting to incidents and trying to fix them after they've occurred.

SPEAKER 3: We're going to have to work harder. As a company, we're going to have to say, OK, we can't ignore a problem anymore. If a guy comes to you and says, hey, we've got oil slopping on the floor down here, we're going to have to do something about it. We can't just say, well, put a bucket under it or throw some floor dry at it. And hopefully, what we'll come out with the management end of it will also say, let's shut that piece of equipment down and fix it today, let's not put it off.

LEIF ENGER: The site program has already racked up some small successes. A four-person crew has been appointed to do nothing but clean up oil spills and repair leaky machinery. And Minntac now orders far less lubricating oil than it did a year ago. Brian Dahlin says a million dollars a year might be saved in fuel and energy bills. And other taconite companies have begun to take notice.

But there are those who say that environmentally responsible workers don't necessarily translate into a similarly responsible industry. Former Federal District Judge Miles Lord presided over much of the Reserve mining case and says the experience took away his faith in American business.

MILES LORD: Jobs prevail, jobs. But my friend Hubert Humphrey said, Miles, we've got to have jobs. They've got to dig some holes. Well, they could dig the holes without doing the damage. And they could even fill the holes. I have watched corporate America. And they'll say whatever has to be said to make a profit.

LEIF ENGER: One result of the Reserve case is a widespread concern that the industry pay for any environmental harm it does. Compared with other mining regions, especially those focused on nonferrous minerals like copper and nickel, Minnesota's taconite business has caused relatively little environmental damage. There's been some reclamation for years.

Some companies have fertilized and seeded old mining dumps. Many ore piles now look almost like naturally wooded hills. And water-filled pits resemble natural lakes. To bolster those efforts, the state DNR last year appointed a task force to study a plan of so-called financial assurance for the taconite industry. Task force member Diadra Decker says the plan would require taconite companies to pay into a fund set aside to reclaim old mines.

DIADRA DECKER: Yeah, we really have to ask ourselves, if the mining industry cannot get environmental damage insurance in the private marketplace, it's just not available to them, why should we, the taxpayers, effectively insure an industry that private insurers won't cover?

LEIF ENGER: A financial assurance program wouldn't be the first to make mines plan for eventual cleanup. Taconite companies are already paying into a fund administered by the IRRRB. In fact, environmental engineers at Minntac say financial assurance is just another word for government double dipping, and the company doesn't like it.

But environmentalists point out that once upon a time, most people thought it was harmless for Reserve mining to pour tailings into Lake Superior and that even now, advances in science and technology notwithstanding, no one knows what hidden costs there might be. The task force will make recommendations to the state legislature in June. Leif Enger, Mainstreet Radio.

CATHERINE WINTER: You're listening to a special Mainstreet Radio broadcast live from Nashwauk. I'm Catherine Winter here with Martin Kaste. And I'd like to ask Doug Schrader, who is here representing the Iron Mining Association of Minnesota. I have heard a complaint that environmental restrictions on iron mines in Minnesota drive up the costs. Is that true?

DOUG SCHRADER: I think as we take a look at federal regulations and certainly some of the state regulations that are being proposed last year in the session and again this year in this session, we have some major concerns about air toxics regulations which would virtually put this industry out of business if they are passed in their current form. And I think we're united certainly with the steelworkers on that position and other labor organizations and industry across the state.

I'm a little bit disappointed that there was so much focus on the Reserve case. Because I can tell you that there have been millions of dollars spent in addressing environmental concerns. We're creating wetlands. We're doing many, many things in a very proactive way.

That's not to take away and turn our backs on problems that date back to the natural ore days. But currently, our operations are doing everything that they can to be environmentally responsible. And I think the US Steel Minntac program that was discussed a few minutes ago is probably a leader in that type of a program, not only in this industry, but in industry across the United States.

CATHERINE WINTER: OK, we're taking questions today from callers over the telephone and also from members of our audience. If I can ask-- I know there are a few people waiting on the phone. If I can ask you to be patient for just a couple more minutes, we'd like to go to Mainstreet reporter Rachel Reabe, who is out in our audience talking with a member of the audience. Rachel.

RACHEL REABE: Catherine, I have Lynnne Gangl with me. She is married to a third-generation miner in Nashwauk, one of the miners that has been idled by National. Lynne, tell us what it feels like to be at this place in your life. You tell me that you're working three jobs to keep food on the table.

AUDIENCE: Yes, I am. We went through this back in 1985, I believe it was. And at that time, I was working three part-time jobs also. My husband, like Rachel was saying, he is a third-generation miner. His father just recently retired from National. His grandfather was employed at Butler and died in an accident at Butler.

So when they talk about the union making strides, one of those strides is in safety for these workers. And he never knew his grandfather.

RACHEL REABE: What do you think people need to know, Lynne, about people in your position? The rest of state listening to this, what do they need to know?

AUDIENCE: I guess what they need to know is that being a strong community helps. They shouldn't have the workers, the families, they shouldn't have to move from this area into high-crime areas such as you were talking before. They like this area, but they shouldn't also have to take low-paying jobs where they get no insurance benefits. The school is having serious problems right now. And it isn't just because of National.

RACHEL REABE: Thank you, Lynne.

CATHERINE WINTER: OK, thank you, Rachel. Let's see. Have we still got some callers on the line waiting? Go ahead with your question, please. We have a-- yes, go ahead. I'm sorry.

AUDIENCE: I wasn't sure I was on.

CATHERINE WINTER: You are. And I interrupted you, and it's all my fault. But go ahead, please.

AUDIENCE: The reason I'm calling is my family is basically from up in that area, from Cloquet up to Cotton, over to Keewatin, down to the Rapids. And I have a lot of members of my family who basically are either underemployed or unemployed. I'm an independent manufacturing and facilities engineering consultant here in the cities. And one of the things that I try to do is encourage my customers when they're looking at expansion-- and I've done with a facilities layoff for them-- is to relocate or build their next plant up there.

Every time I have done that in probably the last four to eight years, I have run up against a brick wall because, oh, it's too strong-- and get this word-- union community. There needs to be something done-- and it's represents my relatives-- of re-educating the people that what they're looking out for is not the old union style tactics and management of the union of maybe, say, the '30s, '40s, and '50s.

There is a real difficulty in convincing very viable industries to move up there because they have such a negative perspective of the area from a union standpoint. I'll hang up and listen to your response on the radio.

CATHERINE WINTER: OK, which of our panelists would like to take that one?

TOM RUKAVINA: Catherine, I'll take that one.

BOB ROOTES: I'd like to come after that, Tom.

CATHERINE WINTER: OK, So Tom Rukavina.

FRITZ KNAAK: I'll follow it.

TOM RUKAVINA: Well, I think perhaps we need to re-educate the rest of the state in that we are reasonable people who work extremely hard to make money for the people that employ us. And in return, we want just a fair wage. That's all, just a fair wage.

We are reasonable people. As I said, it's been the unions who have led the fight in the last three years to get us-- and by us, I mean the Range delegation and the other providers, the mining industry-- to help out the companies. We've got a highly educated workforce. I think we have a work ethic. Commissioner Gustafson mentioned it earlier. Our absenteeism rate is nil, basically. And I've heard that from employers all across the Range.

And that's the education we have to do. And I think-- and I say this very seriously, that the media in Metro Minnesota has done a disservice to the entire Iron Range at times with some of the articles that they published. And they only bring out at times the negative things and not the positive. And it's very hard for us to combat that you have a front page story on the Minneapolis Tribune, where 2 million people read it. It's hard to come back after that.

So believe me, we are more than willing to cooperate and to help out in any way possible to help a business that's willing to come up here and put their capital in our area. And we'll also invest our capital and people power so that we can help them become a profitable company.

CATHERINE WINTER: OK, who had dibs to go next. Was that you, Bob Rootes?

BOB ROOTES: Yes. Very simply, in some of the areas that were discussed here today, just recently, we talked about environmental area. The union is very active in a program where we're working with industry to look at these environmental regulations and fees that the state is thinking of imposing and making sure that they're actually necessary to protect the environment. And at the same time, we want to keep viable, sustainable jobs on the Range. The union's very active in many areas that are non-confrontational with management.

And I just would like to say to anybody thinking of locating a business anywhere that they should come up here and meet with us directly, myself or David Foster or anyone else in current union leadership up here, because they'd be very surprised at how much work we'll do to try to accommodate them.

FRITZ KNAAK: I'd like to--

CATHERINE WINTER: Fritz Knaak.

FRITZ KNAAK: --add a couple things on that. There's no question that the Iron Range suffers from a bit of an image problem in the area of union rhetoric and the like. And some of it largely is undeserved, but some of it is deserved.

I mean, when you hear some of the political rhetoric, even down in the capitol-- when I was there back in the '80s, for example, I remember specifically going nose to nose with somebody from this delegation, not seated to my immediate right. And my comment at the time, it had to do with some minor tax provision and some assumptions about some employers and what they would be doing and not doing. And I had to argue at the top of my lungs that not every employer in the state of Minnesota was Hanna Mining.

There is an antagonistic and historically antagonistic relationship between labor and management up here that that's changing somewhat, but that's the perception. And anecdotally, that seems to be the experience that people want to spread, rightly or wrongly. And that has to change, no question about it. And I think the caller was being candid.

I'd also say-- and this is another problem in terms of a state political issue, the jobs thing, what Miles Lord had to say is very true, the jobs pressure, almost the desperation sometimes that you sense in the arguments about the jobs in the face of environmental concerns. Increasingly, I think what you're seeing growing out largely the metro area again, but the environmental groups, even with respect to a relatively benign, very large industry like the taconite industry, you see these reservations being raised. But it's not just that.

I mean, it's going to go beyond that. You're going to see it-- it's already come out in the expansion of the logging industry in this area and those kinds of fights that are going on. And up here, that's a jobs issue. Down there, you're hearing it as an environmental issue. The same thing with the expansion, the possible expansion into copper mining, which is a much dirtier, mining industry, environmentally speaking, than iron.

And so you're going to see some lines being drawn that we really hadn't seen drawn before. I mean, I don't think of the people, my relatives on the Range, and the sort as being polluters by any stretch of the imagination. But increasingly, you start hearing about expansion of jobs up here in those kinds of terms. And I think you're going to see a Range versus environmentalists kind of dichotomy happening if there isn't some more education.

I'm glad to see, though, that my former colleague Tom Rukavina and I at least agree in our assessment of the Minneapolis paper.

CATHERINE WINTER: Well, Mr. Rukavina, did you want to respond to that? Not necessarily the comment about the Minnesota paper, but the environmental issues that your former legislative colleague has raised.

TOM RUKAVINA: Well, the taconite industry has, I think, been a very, very environmentally clean industry. As the report had indicated, it's fairly benign. And as Fritz said, it is. We're not going to do anything to jeopardize our beautiful resources up here, the lakes that we have, the water that we drink. We're not going to do that-- the air.

And it's unfortunate that one of the things that we've done is a disservice to the mining industry, I think, is the way we have implemented the Federal Clean Air Act and how the Minnesota Pollution Control Agency's Air Quality Division raises about 60% to 70% of their revenue off the seven taconite plants up here. And by the way, they've implemented that program.

The fact of the matter is that water vapor right now that emits from the plants and silica, which is nothing more than sand, is being counted because of the way the federal law is written. And some of the mining industries have seen fees of $5,000 in 1991, I believe it was, go to close to $500,000 by 1993. And there's no incentive by the PCA at all to get them to reduce those emissions, which aren't even harmful emissions. Because the PCA is running that whole division by its fees.

CATHERINE WINTER: Hmm, we have just a couple of minutes left in the program. I'd like to ask our panelists, especially those of you who live and work up here, given everything we've talked about today, do you have confidence that the Range, at least in some form, will survive, that there's still going to be a Range and that the towns and the people who are here are going to be able to stay here? Where shall we start with that?

DOUG SCHRADER: Catherine, I'd like to respond to that first, if I could. This is Doug Schrader from the Mining Association. I'd like to say, I've been here now for two years coming out of Northwest Indiana steel industry. And I've been extremely impressed with the caliber of people that I've met here, people in various forms of leadership, whether it be the steelworkers, our local elected officials, the state legislators. Congressman Oberstar. There are a lot of very well-meaning and bright people here.

And I would agree 100% that this area has gotten a bad rep when you talk about labor relations and those kinds of things. I would just tell you that I am encouraged and plan on making my home here and raising my children here. And this is a wonderful place to live. And I'm encouraged that we do have a future, a very bright future.

And I would say it behooves all of us in a leadership position to put those past differences and put the past rhetoric and the myths behind us. And let's talk about those things that we can do together to once again make this a vibrant economy and keep those things that certainly the people here cherish.

TOM RUKAVINA: Catherine, we're a--

CATHERINE WINTER: Very, very briefly.

TOM RUKAVINA: We are a very resourceful group of people, and we will persevere regardless of what other folks think might happen to us. I know as a third-generation ranger, I can say there's going to be a lot more generations yet that are going to be raised up here.

CATHERINE WINTER: All right. Thanks, Tom Rukavina. I'm afraid that brings us to the end of this special Mainstreet Radio broadcast. I'd like to thank our guests-- Doug Schrader of the Iron Mining Association, Bob Rootes from the United Steelworkers, IRRRB Commissioner Jim Gustafson, former State Representative Fritz Knaak, and Representative Tom Rukavina.

MARTIN KASTE: Our producers today have been Mike Edgerly here in Nashwauk and Sara Meyer in Saint Paul. Our technical director is our Rick Hebzynski and Brian Tonneson in Nashwauk and Randy Johnson in Saint Paul. And we have special thanks today for Nashwauk city clerk Edward Bolf. I'm Martin Kaste.

CATHERINE WINTER: I'm Catherine Winter. Thanks for joining us today. Minnesota Public Radio's Mainstreet Radio is supported by a major grant from the Blandin Foundation, strengthening Minnesota's rural communities through grantmaking, leadership training, and conferencing.