Minnesota is giving U.S. Steel some financial relief as it continues to navigate through a slumping iron ore market that has led to hundreds of Iron Range employees being laid off in recent months.
After some skepticism from the state's top leaders, the Executive Council – made up of the governor, lieutenant governor, secretary of state, treasurer, auditor and attorney general – voted unanimously Wednesday to cut the fees the state charges U.S. Steel to mine taconite on state lands on the Iron Range for 15 months, the Duluth News Tribune reports.
Reducing the company's royalty rates could save the company as much as $4.5 million, The Associated Press says. This move will reduce payments to the state's Permanent School Trust Fund and other state accounts.
The total amount U.S. Steel will save depends on production, the Star Tribune reports.
The idea is that by cutting U.S. Steel's fees, along with the company taking other cost-saving steps, it will help bring people back to their jobs sooner, the Pioneer Press notes.
Though Gov. Mark Dayton and other officials are worried the relief won't be enough to make a difference for the company, the Star Tribune reports. There is also concern other steelmakers will seek state aid as well.
There has been reduced demand for U.S. Steel products because cheaper, foreign-made steel has flooded the U.S. market. As a result, steelmaking giants have idled plants and laid off employees to help save costs during the price slump.