Silver Bay is a city in Lake County, Minnesota, United States. The population was 1,887 at the 2010 census. The city was founded on May 1, 1954 after previously being known as the Beaver Bay housing project. The company town was built to process taconite mined and shipped by train from Babbitt, MN, sixty miles to the northwest. The city attained widespread publicity in the 1960s when it was discovered that the Reserve Corporation was dumping taconite tailings into Lake Superior. In 1972 they were forced to stop and charged with violating the Rivers and Harbors Act of 1899, which prohibited the dumping of harmful materials into interstate waters. In 1977, after a long trial, a new waste-storage facility was built 7 miles inland. Outer Drive (County Road 5), Penn Boulevard, and Minnesota Highway 61 are three of the main routes in the city.