Abstract

The Board of Directors of Vermilion Iron Mining Company was faced with a difficult decision. Since the early 1900s Vermilion operated in the tiny town of Ely, Minnesota. In 1967 Vermilion abandoned its operations in Ely due to the increased cost to mine hematite (high grade iron ore) deep within the ore fields. Vermilion’s departure from Ely was economically devastating to the town. Recent research (2008) found that it was now possible to extract the remaining hematite in Ely’s ore fields and the option to return to the mines of Ely was on the table with the Board of Directors of Vermilion. However, the hematite supply would only last for three to four years. Should Vermilion return to Ely to mine the remaining hematite for the sake of the shareholders or should they consider the potential impacts on the town and other stakeholders?