Iron Range political expert reacts to possible US Steel iron mine buyout

IRON RANGE (Northern News Now) - Cleveland Cliffs is making a push to become the only steel company on the Iron Range with its CEO Lourenco Goncalves offering $7.3 billion to buy U.S. Steel.

RELATED: US Steel rejects a $7.3 billion offer from rival Cleveland-Cliffs; considers alternatives

The two companies becoming one would have a massive impact on the Range and the surrounding region.

“It would for the first time, create a single company that runs all the mining in Minnesota,” Iron Range Political Expert Aaron Brown said.

U.S. Steel rejected the offer because the board argued it was “unreasonable,” but Brown said conversations about Cleveland Cliffs purchasing U.S. Steel are ongoing.

“There’s a lot of overlapping mine lands and leased lands,” Brown said. “A lot of things get easier for the company if they don’t have a competitor mixed in with the land throughout the Iron Range.”

Cleveland Cliffs currently owns four of the six iron mines in Northern Minnesota and buying out U.S. Steel’s shares would give Cliffs control of all of them, along with the power of all the iron workers.

“I would imagine that this will not stop the slow drain of employees lost to things like automation,” Brown said. “We’re looking at automation coming in even bigger. They’re talking about electrifying their trucks. They’re using artificial intelligence they just announced last week.”

U.S. Steel said they received buyout offers from other companies, but the United Steelworkers Union said they would support Cliffs’ buyout.

USW’s International President wrote they feel Cliffs is the single steel producer in the best position to purchase U.S. Steel. It would help ensure U.S.-based iron manufacturing remains strong in the country.

Thay is an endorsement Brown said is unprecedented.

“Unions generally don’t endorse mergers of major companies because of the risk to jobs, but in this case, the steelworkers have formed a very close relationship with Cleveland Cliffs, and particularly with CEO Lourenco Goncalves,” Brown said.

Conversations between the two are expected to continue. It is also worth noting Cliffs received the mineral leases for the former Essar site in Nashwauk.

RELATED: Walz, council grant Cleveland-Cliffs Mesabi Metallics’ old mineral leases

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