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Business North - The Daily Briefing - Business Newspaper Online
Manufacturer, energy project get boost from IRR
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10/15/2009 by Beth Bily |
A Chisholm drill bit manufacturer and a Mountain Iron energy project will move ahead thanks in part to financial help from Iron Range Resources (IRR) grants and loans.
On Oct. 15, the IRR Board approved $2.2 million in direct loans and a $500,000 bank participation loan to help finance expansion at MTD Acquisition, Inc., doing business as Minnesota Twist Drill. In turn, the company promises to add 50 to 75 jobs by 2015.
The board also approved a $1 million grant to the Mountain Iron Economic Development Authority to accelerate its proposed wind energy project. The grant will help finance preliminary development costs of First Energy Wind, a $23 million plan to generate 9 megawatts of electricity, near Giants Ridge. The grant is the result of a nearly $6 million transfer to the state agency’s Taconite Environmental Protection Fund, available for cooperative projects between IRR and governments for renewable energy initiatives
Meanwhile, Minnesota Twist Drill plans to double the number of drill bit grinding machines on its shop floor and upgrade the plant to accommodate the expansion. Total project cost is $6.6 million, financed with a combination of IRR and bank loans.
The company has 61 employees, but has endured difficult financial times over the past 18 months. “We started to feel (the decline in the economy) by the middle of 2007,” said Scott Allison, president and CEO.
Allison said employees helped the company ride out the downturn, even agreeing to 20 percent time furloughs. They are back full time, Allison said.
The company’s drill bits are used in maintenance, repair and operations markets, construction and the light-to-heavy industrial market. The expansion will allow the company to access new round tool configurations, and meet customer demand for a full range of tool products.
State Rep. Tom Anzelc, DFL-Balsam Township, an IRR board member, praised the company, noting it is an “American company providing benefits.” Twist Drill’s average wage is $16.34 per hour. The loans will be secured by liens on equipment, inventory and real estate, and the personal guarantee of the company’s principals.
In other actions, the board:
• Approved a $40,000 participation loan to Birchem Logging, Inc. to purchase equipment for expansion into the biomass industry. Total project cost is $80,000.
• Approved a $150,000 rebate incentive for WercWerkWorks filming of the movie, “The Convincer” on the Iron Range. If filming takes place on the Iron Range it could generate an estimated $1.5 million in economic activity.
• Approved a $315,000 grant to Northeast Higher Education District for development of five industrial, technical programs. Funding is from IRR’s Iron Range Higher Education Account.
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