Iron is back on the rise, creating jobs not only in mining operations but also in recycling efforts and transportation.
The iron and steel industry relies heavily on railroads to transport materials between each step, from mining to the final product. This relationship will continue as long as iron and steel are being used because of their mass and the amount that needs to be hauled at one time.
While mining iron ore has negative impacts on the environment and, subsequently, the health of those around mining operations, the industry is efficient in transportation and waste reduction. In fact, a large portion of iron and steel gets recycled and is then moved by the most efficient modes of transportation.
While mining may have serious environmental impacts, largely in terms of displaced wildlife, soil degradation and the repercussions of sealing a mine, iron has a wide range of uses along with durability. Softer metals cannot withstand the same use and would not last as long, and the mining process to extract them is just as detrimental. More ore would need to be mined, and more finished products would need to be produced more often. Additionally, many of the substitutes cannot replace all of the uses for iron and steel, especially in heavy machinery and building materials. As long as cities continue to grow and develop, iron will still be in demand.
As shown in SONAR, primary metal products carloads (RTOPM.USA) show the combined movement of freshly mined iron along with recycled iron, once they are made into usable pieces or steel. Recent growth in carloads suggests an improving market and favorable conditions for domestic iron production. These primary metal products are transported to manufacturing plants and construction sites to be made into their final form. Therefore they are among the first indicators of an improving market, which can be broken down between new iron ore and recycled iron and steel scrap.
SONAR: RTOPM.USA
Mining for iron ore
Large mining operations have rail spurs to transport the ore. Metallic ores carloads (RTOMO.USA) primarily consist of iron, along with other metals like copper, lead and zinc. After the Great Recession, former President Barack Obama’s pressure to lower carbon emissions negatively impacted mining operations, incentivized the importation of iron and increased recycling efforts.
After President Donald Trump took office, the volume of metallic ore carloads increased, which suggests an increase in domestic iron production. This is likely a result of the tariffs he placed on Chinese imports and reduced environmental regulations.
With the increase in domestic iron production, employment has been increasing at mining companies. In fact, from 2016 to 2017, about 10,000 more people were employed in mining operations, in comparison to the drop in employment that began in 2014, according to Statistica. Smaller city and state economies, such as Minnesota, have been seeing improvements with more employment.
SONAR: RTOMO.USA
Recycling iron and steel scrap
Objects that are primarily made of iron and steel are made mostly, if not entirely, from recycled products. Approximately 85 percent of iron and steel is recycled globally, and in the United States, they make up the majority of recycled objects. The recycled iron and steel volumes are shown in rail movement between scrap collection centers, or recycling centers, and steel mills. Iron and steel scrap carloads (RTOIS.USA) generally have an inverse relationship with metallic ore carloads. The scrap carloads are driven by the price of scrap as well as its demand.
SONAR: RTOMO.USA, RTOIS.USA
Recycling centers, or scrapyards, that are located along bodies of water also may utilize a different transportation option – barges. Barges have the ability to transport a great deal at once, while being an even more energy-efficient mode of transportation than trains. However, for many companies, barges are not ideal due to locational limitations, cost of equipment and dock access. Therefore, a strong relationship continues between the railroads and the iron and steel industry.
As population grows and demands for iron and steel products increase, recycling cannot furnish all the needed materials. At the same time, it is clear that there is a slow-moving shift away from iron and steel in favor of substitutes. Emissions policies and cheaper iron produced in other countries pushed many of the domestic iron mining jobs out of the country, which just means that U.S. citizens do not experience the negative externalities of domestic mining. Cheaper iron is a result of mining operations underpaying laborers and not having as extensive environmental regulations. Domestic production ensures that the miners have control over their human rights and surrounding communities experience cleaner and safer environments. Regardless, the durability and wide range of uses of iron ore means that iron is here to stay.
