Entrepreneur finds profits in waste rock at abandoned mine

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When others saw piles of waste rock at a former LTV Steel Mining Co. property, an entrepreneur saw beautiful stones that would be desirable to builders, contractors, designers and others.

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Entrepreneur finds profits in waste rock at abandoned mine

LEE BLOOMQUIST, Duluth News Tribune

Worthington Daily Globe - 01/07/2008

HOYT LAKES, Minn. (AP) - When others saw piles of waste rock at the former LTV Steel Mining Co. property, Brad Gerlach saw opportunity.

"My brother (Bruce) was closing the mine and said, 'Why don't you come out here and take a look around?'" said Gerlach. "On the day I went out there, it was raining and I saw all the different colors of the stone. I said, 'What are you going to be doing with all that beautiful stone?' He said, 'Do you mean that waste rock?' I said, 'No, I mean that beautiful stone.'"

Five years later, Gerlach is selling thousands of tons of the colorful stone to owners of multimillion-dollar homes, contractors, landscapers, masonry companies, real estate developers, architectural firms, the U.S. Army Corps of Engineers and the public.

The Precambrian stone — an estimated 1.8 billion years old — is a naturally produced product that's being hand-picked in an environmentally friendly harvesting process.

LTV Steel Mining Co. operated from 1951 to 2001, producing about 323 million tons of iron ore pellets.

As miners blasted and dug for iron ore, the stone covering the iron ore was moved to stockpiles or used in the creation of berms.

Included in the stockpiles and berms are tons of slate, diopside, jasper, banded taconite, marble, greenolite, flagstone and stromatolites.

Stacked in the stockpiles and berms, the stone is hand-picked and loaded onto trucks for interior and exterior home veneers, walls, steppingstones, ponds, foundation rock, and for countertops, tables, and tiles.

"We like it because it is essentially a green product," said Brady Halverson, a landscape architect at Short Elliott Hendrickson, Inc. a Minneapolis architectural planning, engineering, and natural sciences firm. "It's a byproduct of a process that's already taken place in the mining of iron ore. And it's available in a variety of forms from aggregate size into slabs. You can use small stones next to large veneer and get it to look the same."

A 17-foot-long, 8-foot-wide, and 12-to-14-inch thick piece is being used as a bridge at a new Bell Museum of Natural History building proposed in St. Paul.

Stone from the site was used to build the Paul Wellstone Memorial near Eveleth, at Normandale Community College, the Dr. (E.W.) Davis taconite museum at the University of Minnesota, Minneapolis Library, and in tabletops at the Guthrie Theater.

Next year, Short Elliot Hendrickson will use the stone as veneer on a concrete bridge to be built over a river near downtown Tower.

"It is what it is," said Gerlach, 59, a retired food industry worker. "We don't do any blasting and we don't have to cut. We're like a chef's salad that nobody's ever seen. We have the most beautiful stone in the world."

In addition to the stone being reused, the site itself is being recycled. Along with natural stone production, the world's first commercial iron nugget plant is under construction. PolyMet Mining Corp. of Vancouver, B.C., plans to use portions of the former LTV concentrator to process copper, nickel and precious metals from a proposed mine to the east.

"This has to be the busiest closed mine there is," Gerlach said.

The entire LTV site, now called Cliffs-Erie, contains an estimated 12.9 billion tons of stone, Gerlach said.

Joel Evers of Hoyt Lakes, a geologist and former LTV section manager of mining, said the stone is in huge demand by contractors and landscapers as a natural product.

"A lot of the stone used in landscaping is kind of bland, but this stone has blacks and greens and reds and has a lot of different patterns, shapes, and textures," Evers said. "Its colors, textures and patterns are what make it so unique, The landscaping market has been begging for something new and is running out of natural rock. Brad just kind of hit on it at the right time."

It's also heavy. Stone harvested from the site weigh about 225 pounds per cubic foot compared with about 175 pounds per cubic foot for granite, Gerlach said.

"It's some of the densest stone in the world, with lots of intrusions and color combinations," Gerlach said. "When you look at a lot of fireplaces inside or outside, it's cultured rock — fake," Gerlach said. "But now, customers want the real stuff and many quarries in the country are falling behind the demand. Rocks are hot."

From 2002 until recently, the company was known as Cliffs Natural Stone LLC. It was 56 percent owned by Cleveland-Cliffs Inc., 22 percent by Gerlach and 22 percent by Gerlach's partner, Steve Hedberg. Hedberg operates five Twin Cities landscaping yards.

On Dec. 17, Gerlach and Hedberg closed a deal under which each now owns 50 percent of the company. The name of the company was changed to Mesabi Natural Stone LLC.

Mesabi Natural Stone owns 30 acres of property at the former taconite plant and under leases with the state, Cliffs-Erie and Great Northern Iron Ore Properties. The company also has an agreement with Northshore Mining Co. for the harvesting of stone in an area of its Peter Mitchell Mine near Babbitt that's not active. The company picks rock from the middle of March until the end of November.

Northshore general manager Mike Mlinar, Northshore mine manager Doug Halverson, and Gerlach's brother Bruce, who managed the Cliffs-Erie property, were instrumental in helping the stone company become operational, Gerlach said. In 2007, the company had sales of $1 million, Gerlach said.

By the end of 2008, Mesabi Natural Stone officials hope with a partner to construct a year-round stone manufacturing plant operating at the site. About 35 to 40 employees would slice and polish stone, turning it into countertops, tabletops and tile.

By September 2008, Mesabi Natural Stone hopes to reach annual sales of $2.5 million, Gerlach said. Sales of $4 million to $5 million are projected from 2008 to 2009. Future annual sales could reach $20 million, Gerlach said.

Within five years, the dimensional stone manufacturing plant could employ 50 to 70, he said.

In addition to marketing the stone on the retail market, Gerlach said the company will sell stone to anyone who gives the company a call.

"So far, it's all pretty much been from word-of-mouth," Gerlach said of sales. "But we're planning to do a lot more advertising. This is going to be a real solid growing business employing more people every year."