DULUTH — Iron mined in northern Minnesota is turned into steel, which is turned into cars and appliances, which are turned into scrap, which is recycled into steel, which is turned into grinding balls, which are used to mine more iron.
Keep that circle moving, and there is plenty of money to be made, as the Duluth grinding ball plant on Garfield Avenue has shown over the past 40 years. What started as a 1,500-ton-per-year operation employing 12 people now produces more than 100,000 tons annually and employs 50 people.
“It’s a good business, and it’s not a product that’s going obsolete — they still use grinding balls for processing almost every mineral we use nowadays,” said David Pierson, a sales representative who has worked at the plant since 1978. “If it can’t be grown, it has to be mined. And in order to get the waste rock away from the mineral they’re looking for, they use grinding balls to separate them.”
Now owned by Brazilian steel giant Gerdau, the plant was built in 1977 by Cargill-owned North Star Steel to take advantage of the company’s mill in St. Paul, which still provides the Duluth plant with its raw material.
“It took us the next 20 years to get to our capacity,” Pierson said, and with a fourth production line added in 2000, it took only five years to get to the current capacity. Now there is talk of a fifth line at some point.
Not every manufacturer has been so lucky, in the Twin Ports or elsewhere, as the number of manufacturing employees and firms have plummeted since the grinding ball plant opened. (Manufacturing employment in the U.S. peaked two years after the plant opened.) But the Gerdau plant has diversified its customer base to withstand taconite cycles and refined its product line to fight the tide of imports and domestic competitors.
“Over the last 40 years, they have seen a lot of ups and downs in the market, and for them to grow and succeed is a testament to the hard work and perseverance of their staff,” said Jeremy Lehman, president of the Arrowhead Manufacturers & Fabricators Association. “I’m very optimistic about manufacturing in the Northland. I’m seeing a lot more positive signs now than in recent years.”
From the beginning
Pierson, 64, is the last of the original crew — the 12 men and women who turned out the first few thousand tons of steel grinding balls — still working at the plant. He worked as a forge operator and front line supervisor before moving to sales. His career at the plant actually started before it opened — Pierson worked to build the $4.5 million plant before getting hired by Cargill to work there in 1978.
“It’s an industrial success story,” he said of the 40 years of growth at the plant.
There were shutdowns and layoffs in the early ’80s amid the steel industry meltdown, but the Cargill plant clawed back and reached its first production peak in the ’90s.
“The way we got to that capacity was diversifying our markets,” Pierson said. “It wasn’t just the Iron Range anymore. We went out west to the copper mines, up into Canada in the gold mines, southeast in the phosphate mines.”
Employment grew out of necessity, since it takes some specialized skills to maintain the production lines.
“These machines do their jobs by destroying themselves,” Pierson said.
That reality, and improving technology, gave birth to many innovations on the lines that lifted efficiency rates from 65 percent to 90 percent. Getting a new $3.4 million production line in 2000 didn’t hurt, either.
Gerdau also poured money into the plant after buying North Star Steel from Cargill in 2004. Cargill has almostly completely divested from its steel ventures, with another major sale in 2015.
Gerdau, which reported $11.5 billion in sales last year, seems headed in the opposite direction.
“They wanted to become a global company, so they bought up steel companies around the world,” Pierson said.
On the ground at 800 Garfield Ave., a steady, high-pitched rumble runs 24/7, though it doesn’t carry too far.
“We’re pretty quiet down here, although we make a lot of noise,” Pierson said
Plenty of people drive over the Blatnik Bridge without knowing what those piles of steel rods are destined for, or that they come from machines like the one they’re driving.
“When I talk to people and they ask where I work, I say Gerdau. Then I tell them it used to be North Star Steel: ‘Oh I’ve heard of them,’” said Louie St. George Jr., a 66-year-old utility man.
The view from the bridge could change if a fifth production line is added. It would take a great deal of money — a completely new plant was estimated at $45 million a few years ago — and some of the vast acreage Gerdau holds along the St. Louis Bay.
“We’d have to put up a new building for it. And I won’t be here to see it,” St. George joked, since he’s a few months from retirement.
The cost of power could also factor into further growth at the plant.
“It’s our biggest cost behind labor,” Pierson said, though conservation efforts have helped bring that down of the years.
“Our conservation improvement team has worked with the company on a number of energy efficiency projects over the past seven years, providing $70,000 in energy efficiency rebates,” said Minnesota Power spokeswoman Amy Rutledge.
What local growth really hinges on is growth in North American mining, and the ability for Gerdau to keep its high-carbon, low-alloy steel grinding balls competitive.
“If there’s a buck to be made, there’s always somebody standing behind you willing to do it for 95 cents,” Pierson said.