The St. Louis County Board on Tuesday gifted a plot of tax-forfeited land to the city of Mountain Iron for a proposed $70 million wood-products manufacturing plant.
The approval came after weeks of debate between Iron Range members on the county board over future mineral rights on the site, especially waste iron ore from old mining operations that might someday be recovered.
Attorneys hashed out an arrangement, however, that will let the state and local taxing authorities retain rights to any minerals on the land while still allowing for the land exchange and development.
The resolution passed by a unanimous vote at the county board's regular meeting held at the Duluth Township Hall.
As first reported last month in the News Tribune, the plant would make biochemicals out of wood, employing about 30-35 people to start.
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The as-yet unidentified company is working with the Iron Range Resources and Rehabilitation Board to develop the site just north of the Laurentian Energy wood facility in Mountain Iron, part of the city's large "renewable energy" industrial park area just off U.S. Highway 169.
The site is considered critical for the company to share wood-supply facilities with Laurentian, which supplies wood for the Hibbing and Virginia municipal power plants.
The IRRRB is expected to approve the project at a meeting later this month, and the land conveyance needed to be settled by them, county officials said.
Supporters say the new plant could grow to more than 130 employees if successful. The project also would increase demand for wood from local forests, spurring more work for the area's loggers and truckers who have been hard-hit by numerous wood products plant closures in recent years.
County Commissioner Frank Jewell of Duluth said commissioners and even city officials have been told little about the company planning to build in Mountain Iron.
"I voted for it and I'm fully supportive of some diversification of the economy on the Iron Range," Jewell said. "But the IRRRB is expecting a lot without telling us who we're giving the land to."
The property in question, about 52 acres total, was owned by the city of Mountain Iron at one point but reverted back to the county after a previous project fell through.
The Mountain Iron City Council last month made changes to city zoning rules to allow for the new project, said Gary Cervenik, a consultant on the project, told the News Tribune. Mountain Iron also has pledged to approve a special use permit for the project but can't vote on that permit until more information is available on the company and its plans and a public hearing is held.
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The land deal was proposed last month by Commissioner Tom Rukavina of Pike Township. But Commissioner Keith Nelson of Fayal Township expressed strong concerns that mineral rights be retained so any future use of the minerals, either stockpiled on the surface or below, would continue to provide royalties for the county and other local governments.
A state minerals expert says there are more than 1.8 million tons of iron ore tailings on the site that could be recovered.
The proposed plant doesn't appear related to another Iron Range biomass-based project. Twin Cities based Segetis is planning to build a $105 million plant in Hoyt Lakes that would use chemicals derived from wood to make an array of products that are commonly made from oil, including key elements of soaps and detergents.
The Segetis plant would start small, using corn-based feedstock to derive sugars that would be made into levulinic acid, a key building block used to make plastics and cleaning compounds.
Segetis plans to eventually move to wood-based biomass instead of corn and said it would like to purchase the biomass extract from a local provider by about 2018, eventually using up to 400,000 cords of wood per year.
