Helium company plans to build processing plant in Two Harbors

TWO HARBORS — A proposed helium processing plant in Two Harbors could be a boon for a new advanced manufacturing and medical economy in Minnesota.

The Two Harbors City Council approved a developer agreement with Pulsar Helium on Monday, Oct. 12, as a first step toward a facility that would process helium and other rare gases.

The agreement does not commit Pulsar to building the facility, which would include helium liquefaction and carbon capture capabilities, according to a Tuesday news release from the North Shore city.

Pulsar has been exploring Minnesota’s helium deposit since 2021, with testing since then indicating it may be one of the most concentrated deposits of the gas ever recorded on the planet.

“Finding it’s one thing,” President Cliff Cain said in an interview Tuesday, “taking that next big step is to actually get into production.”

Helium plays an important role in manufacturing, research and national defense. Semiconductors, fiber optics, MRI machines and electric vehicles all rely on helium, and liquid helium — the coldest element on the planet — cools everything from rockets to nuclear reactors.

But the helium market is unstable, and there have been regular shortages over the last few decades. The U.S. sold off its helium reserve in 2024, and Cain pointed to recent supply chain issues caused by the Iran war and the Russia-Ukraine war.

“It’s become more critical that we need something larger,” he said. “We need a plant that not only could potentially process [helium from Minnesota], but we can actually bring in helium molecules from elsewhere.”

The agreement approved Monday only establishes a development framework for a Rare Gas Hub proposed for 62 acres in the city’s industrial district.

Financing, property review, utility arrangements, supporting agreements and additional approvals must all be completed before the project can move forward, with additional opportunities for public review and feedback to come, according to the release.

Pulsar is currently exploring financing with the Minnesota Department of Employment and Economic Development, the Department of Iron Range Resources and Rehabilitation and the U.S. Department of Agriculture Rural Development.

“This agreement gives Two Harbors an opportunity to build on our industrial history and bring a new type of business to our community,” said Mayor Lew Conner in the release. “We want to create economic opportunities for our residents while being clear about the city’s investment and the work that still needs to happen. This is an important step forward, and we will continue working through the financial, utility and development details in the public process.”

Why Two Harbors?

Cain remembers seeing the city’s water tower when he was exploring potential sites across the state last year. “It All Starts Here!” the tower reads.

“And I said, ‘You know, it might. It might start here,’” he said. “They have kind of everything that you’d need for a Rare Gas Hub to be successful, including a port.”

The road, rail and energy infrastructure were all the right fit, and while there are no current plans to incorporate the city’s port, Cain said he could see a future where helium is shipped in.

The plant would create an estimated 20-30 full-time jobs, he said, in addition to the labor needed to build it. Cain said Pulsar would be “working closely with labor here in Minnesota.”

But Cain expects the plant to have a much larger economic impact, potentially kickstarting a new advanced manufacturing industry in Minnesota and offering low-cost helium for the businesses that are already here.

“The hope is that Minnesota is ready for business. I think it is, right?” he said. “We’re trying to be that carrot at the end of the stick to help attract customers to Minnesota to set up shop.”

What does helium production look like?

Production of the helium itself is rather simple.

The gas is extracted essentially through a straw stuck in the ground. It comes out into above-ground piping and is pumped into a container.

In Pulsar’s early samples, the gas was up to 71% carbon dioxide, 24% nitrogen and less than 5% hydrocarbons — gases like methane and propane — in addition to the helium.

The gases move through a series of modules to be separated.

Earlier this month, Pulsar signed an agreement with Chart Industries, which has a manufacturing facility in New Prague, for $85.5 million worth of equipment for its Rare Gas Hub. The agreement outlines liquid helium capacity of almost 2 million gallons a year.

In 2024, Pulsar said it was planning to process gas on its drill site in the Superior National Forest east of Babbitt and estimated it would only need, at most, 2 acres of land for production.

But Pulsar President Cain said a lot has changed since the company’s initial discovery. The Rare Gas Hub would process medical-grade helium alongside food-and-beverage-grade carbon dioxide. Only a few other plants in the world can produce helium of that grade.

Cain noted the helium drill site is fairly remote.

“Trying to build a full-blown Rare Gas Hub facility there would cost X amount more dollars than we would normally have, right?” he said. “You got to build new rail, you got to build new power infrastructure, you got to build new roads, and that becomes problematic, right? And we need to get to production, and now is the time.”

What's in the agreement?

The news release from the city details what the city has committed to, as well as the many aspects of the project that have yet to be determined.

Under the agreement, the city would contribute up to $1 million toward the construction of a rail spur, with Pulsar covering any additional costs of rail construction. The city would retain permanent rights to municipal use of the rail and could make it available to other customers for a fee.

The city would also clear the building site and road corridor, extend water, sewer, natural gas and electric service and fund surveying and wetlands work. The utility rates would be set in separate agreements.

“Estimates for clearing and utility improvements remain to be finalized, so the full value of the city’s financial participation has not yet been determined,” the release states.

The city proposes selling land appraised at $143,200 to Pulsar for $1 and a 15-year property tax abatement, the value of which has not been set.

Plans must also include “a substantial tree and vegetation buffer” on the western and southern edges of the property.

Once Pulsar formally commits to the project, it would have three years to begin operation, though extensions could be granted.

‘Minnesota or the moon’

The focus on production doesn’t mean that Pulsar has forgotten about Minnesota’s helium deposit.

Not only is it perhaps the richest in the world, but now the deposit is being compared to those on the moon.

“I never thought in a million years I would be competing against the moon for dollars and clients,” Cain said. “But the potential for the first-ever terrestrial helium-3 processing being built right here in Minnesota would be a global first.”

The helium that we use in manufacturing and balloons is helium-4. Helium-3 can be used in quantum computing, which is one of the biggest focuses in technological advancement, as the U.S. and China race to be the first to crack the next step in computing.

Gas extraction moratorium still in place

Right now, there is nothing stopping Pulsar from moving forward with its Rare Gas Hub.

But because gas extraction has never taken place in Minnesota, there are no rules or regulations for the industry.

The Department of Natural Resources and other state agencies have been working on creating those rules since 2024, addressing permitting, taxes, environmental review and other topics.

In the meantime, the Legislature created a statute that says people must have a permit to carry out gas extraction and passed a moratorium on issuing permits until gas extraction rules have been put in place.

Cain said he expects the rules to pass in the next legislative session, noting the governor’s office, state Sen. Grant Hauschild and U.S. Rep. Pete Stauber have all been very helpful and supportive.

“No opposition to this project,” Cain said. “A lot of support for it.”

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