Cliffs Natural Resources will restart two taconite lines at its Minnesota plant

  • Article by: DEE DEPASS , Star Tribune
  • Updated: October 25, 2013 - 9:04 PM

The company is bringing back the two Northshore Mining production lines to fulfill a new contract with a U.S. steel company.

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Pellet load-out bins stand at the back of the Hibbing Taconite Co. pellet manufacturing plant, operated by Cliff's Natural Resources Inc., in Hibbing.

Photo: Ariana Lindquist, Bloomberg

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Cliffs Natural Resources Inc. said Friday that it will reopen two taconite production lines at its plant in Silver Bay, Minn., because of a new supply contract that will start in 2014.

Spokeswoman Sandy Karnowski said the company doesn’t have a date for when production on those lines will begin, but said a new schedule and workforce plan should materialize in the next few months.

Cliffs will increase U.S. production of iron ore pellets from an estimated 20 million tons in 2013 to 22 million to 23 million tons next year. The boost has come from a new contract with a U.S. steelmaker that needs more taconite, the key ingredient in steel. Cliffs declined to disclose the name of the customer.

“It is a positive development any time you are ramping up production,” Karnowski said.

Cliffs is also enjoying a comeback in global taconite pricing, which collapsed last year but is climbing again. Prices jumped 17 percent in the third quarter, Cliffs officials said while announcing earnings this week.

The news is a shot in the arm for the once battered taconite industry, which has suffered significant price declines and a drop in global steel demand over the past couple of years. The changes have hurt Minnesota’s northeastern Iron Range, which has the nation’s largest iron ore deposits. Publicly held Cliffs, in particular, was pounded at different times last year as taconite prices plunged nearly 40 percent.

Ten months ago, Cleveland-based Cliffs cited “a drop in customer demand” as the reason it stalled two of its four production lines at its Northshore Mining plant.

The idling caused the layoff of 80 of the 671 workers who are split between Cliffs’ iron ore mine in Babbitt and its Northshore taconite plant in Silver Bay. About 20 were called back for a project during the spring, but returned to layoff status, Karnowski said. Several workers have since found other jobs and so only about 54 are still considered officially laid off, she said.

Karnowski added that it is not known how many will be brought back once production ramps up. That information will come later.

She added that Cliffs officials made welcome calls this week to the mayors of Silver Bay and Babbitt and to Tony Sertich, the commissioner of the state’s Iron Range Resources and Rehabilitation Board. Just a year ago, Sertich and other officials at the IRRRB were talking to Gov. Mark Dayton and state jobs experts to hammer out a plan to help Cliffs’ laid-off workers.

In addition to the Northshore operations in Silver Bay and Babbitt, Cliffs runs the unionized Hibbing Taconite and United Taconite plants in Eveleth and Hibbing. It also operates the Empire Mine in Michigan, a site that was idled over the summer but brought back in the fall. “It is up and running … but the plan is to start shutting down that mine at the end of 2014,” Karnowski said.

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