A Minnesota-based miner's $350-million investment in a new taconite pellet plant in Reynolds, Ind., is giving a much-needed boost to central Indiana's economy after a painful downturn that sent skilled tradespeople bolting across the state line, employers say. The project also forecasts further labor crunches in the region as employers continue to seek skilled labor amid upticks in activity.
"This particular project has opened up a lot of jobs in the construction field," says Scott Potter, project manager for Logansport, Ind.-based Dilling Group Inc., a mechanical contractor helping to build out the pellet plant. So far, it has been busy building a 100-ft-tall ball mill, two 70-ft-dia thickener tanks and a filtration building on the nearly 400-acre site.
Officials with the owner, Magnetation LLC, say the mining company has enjoyed selecting from a wide pool of hungry firms eager to participate in the effort. "We've got contractors from Minnesota to the southern part of the country here," says Josh Kraushaar, Magnetation's project manager. "The contractors are willing to travel further than they normally would."
The downside, however, is that many craft workers exited the field during the downturn or fled to higher-paying parts of the region. As a result, builders complain that skills have been increasingly hard to find.
"We're struggling to find top journeymen hands in all phases of construction," says Potter. "That's probably the biggest hurdle on this project." The volume of work is spiking fast. At peak, when contractors start fitting out the plant's electrical and piping runs, the plant will host some 600 workers, up 200 from today. What's more, Magnetation is recruiting about 100 workers to shadow the construction crews and stay on to staff the plant when it goes into production.
Still, by all accounts, project team members report the job is progressing smoothly, with schedules and budgets on track to meet an ambitious timetable to start shipping pellets by the end of the year. "We didn't break ground until the third week of March 2013," Kraushaar says. "It's going amazingly fast."
Covering some 410,000 sq ft of floor space and 32.6 million cu ft of air space under roof, the 15-building pellet plant is rising in an unlikely spot to feed the region's steel industry. The site—originally planned and partially developed with railroad infrastructure to accommodate an ethanol project that was later abandoned—is landlocked and remote. However, it is in close proximity to vast reserves of other minerals, such as limestone, that are needed to convert Mesabi iron into taconite, a key component of steel production.
Conveniently, the site also touches two major railroad lines, which provide competitive transportation. "Any time you can get two railroads to fight for your product, that's a good thing," explains Terry Nanti, general manager for the pellet plant. "We did the numbers on the cost, and it was the cheapest place to build. You can even truck in the limestone and dolomite."
Partly the result of good homework and a few strokes of luck, the owner, a joint venture between Grand Rapids, Minn.-based Magnetation Inc. and West Chester, Ohio-based AK Steel, decided that Reynolds was the ideal place to build the pellet plant. "If you draw a straight line from Middletown, Ohio, to Grand Rapids, it comes right through Reynolds," explains Nanti. The facility, he adds, will have the annual capacity to produce 3 million metric tons of pellets used to make automotive and appliance-grade steel.