Business & Economy

North Carolina company drops plans for northeastern Minnesota wood mill

Norbord Minnesota's Bemidji plant
Loose wafers and strands of wood are formed into sheets on a production line of oriented strand board plant, the Huber mill's proposed product.
Tom Robertson | MPR file photo

A North Carolina-based company — that nearly two years ago proposed building a $440 million mill in the small town of Cohasset, Minn. — said Thursday it no longer plans to pursue permitting and construction of the facility.

The announcement comes three days after a state court ordered the city of Cohasset to reconsider its environmental review of the project.

“Due to delays that jeopardize our ability to meet product demand deadlines, we will pursue development of our sixth mill in another state,” said Huber Engineered Woods President Brian Carlson in a statement.

“We will be seeking a new location where we can produce critical home building products that are desired by American home builders and homeowners in a timely manner and consistent with Huber’s environmental and social commitments.”

When the project was first announced in the summer of 2021, it was celebrated by Gov. Tim Walz for the 150 jobs it would create, and for providing a major jolt to northeastern Minnesota’s forest products industry, which has suffered from the closures of several mills around the region over the past two decades.

Huber initially planned to break ground on the 750,000 square foot facility in the spring of 2022. The project was given a major boost by more than $50 million in production incentives, loans and other incentives from the state Legislature and two state agencies.

But the project ran into opposition from the Leech Lake Band of Ojibwe, whose reservation is located about a mile from where the mill was proposed.

The band was concerned that the mill — which would have required about 400,000 cords of timber to be cut annually from nearby forests — would have adversely impacted its treaty-protected resources in the area.

“This project would be a further use of clear cutting in northern Minnesota, which doesn’t allow those types of older successional forest types to proliferate, and really does impact the ability of tribal members to gather culturally and spiritually significant resources that grow in those forest types,” said the band’s legal director Chris Murray.

The band also argued that the mill’s construction would have filled critical wetlands connected to the Mississippi River, including a place where members harvest wild rice.

In its decision earlier this week, the Minnesota Court of Appeals asked Cohasset to reconsider its decision not to complete a more rigorous and time-consuming environmental review of the project, in light of those impacts on wetlands at the site.

Tamara Lowney, President of Itasca Economic Development Corporation in Grand Rapids — just down the road from Grand Rapids— said Huber’s decision wasn’t a direct result of that court decision. She said the company had been “thinking hard” about this for the past six months.

"They've really felt frustrated by feeling like there was an incredible amount of red tape they had to work through,” Lowney said. “The permitting process we have in our state is really something that's challenging for any company."

The plant was to be built adjacent to Minnesota Power’s Boswell Energy Center in Cohasset. The Duluth-based utility plans to close the coal-fired power plant by 2035. The Huber mill was viewed by community leaders as a critical project to help the region transition after Boswell was shuttered. The power plant makes up roughly 55 percent of the city’s tax base.

“This is a devastating day for our community, our region, and our state,” said Cohasset Mayor Andy MacDonell. “The Huber project was central to our city’s strategy to diversify our tax base and create high-quality jobs in the face of the massive losses we will see when the Boswell Plant retires.”

MacDonell added that Cohasset will need help from state government and regional partners “to support our community through this transition.”

In a statement, the Leech Lake Band said “We were deeply concerned about the potential impact of the proposed plant on the environment, the attempted shortcuts in the environmental review process and the absence of meaningful tribal consultation at the start of project,” adding that they took legal action to ensure the tribe's rights and interests were protected.

The mill was slated to manufacture oriented strand board, or OSB, a type of compressed wood panel used in wall and roof sheathing, subflooring and other engineered wood products used in housing and light commercial buildings.

The country’s first OSB plant was built nearby in Grand Rapids in the 1970s.

Commissioners of two state agencies— Iron Range Resources and Rehabilitation and Employment and Economic Development— both issued statements lamenting Huber’s decision to pull out of Minnesota. Both agencies approved incentive packages to lure the company to the state.

The Minnesota Pollution Control Agency “worked closely with Huber and prioritized their project by committing significant staff resources to develop and implement the most efficient and thorough permitting timeline, including partnering with local leaders to try to resolve outstanding questions from the federal government,” said Commissioner Katrina Kessler.  

Republican politicians representing the region at the state and federal level also weighed in, blaming Huber’s decision on a burdensome regulatory process.

“Huber electing to not continue pursuing an improved wood products facility in Cohasset, Minnesota is an indictment on Minnesota’s anti-jobs approach to development,” said northeastern Minnesota Congressman Pete Stauber.

“Whether it be local, state, or federal compliance, it is too hard to permit a project.

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