Cliffs Natural Resources will reopen its Northshore Mining operation in Silver Bay before the end of June and reopen its idled United Taconite operation in Forbes and Eveleth later this year, officials said Thursday.
Cliffs — which operates United Taconite, Hibbing Taconite and the nonunion Northshore Mining on Minnesota’s Iron Range — gave the update as it reported that first-quarter revenue fell 32 percent to $306 million. However, the company made a profit of $117 million, or 62 cents a share, for the quarter, compared with a loss of $762 million, or $4.26 a share, in the same period a year ago. In 2015’s fourth quarter, the company lost $54 million.
Cliffs has been restructuring for more than a year as it copes with the global downturn in iron and steel sectors that suffered the worst price declines and illegal steel dumping in years. The result has been the idling of plants across the United States and Canada, including Cliffs’ operations on Minnesota’s Iron Range.
All combined, about 960 Cliffs workers on the Iron Range were temporarily laid off when Cliffs idled its United Taconite plant in August and its Northshore operations in Babbitt and Silver Bay by Dec. 31.
The idling of plants and equipment upgrades in Minnesota cost the company about $25 million during the quarter, said Cliffs CEO Lourenco Goncalves in a statement.
“Cliffs’ first-quarter results clearly demonstrate how far we have come on our turnaround. As we continue to outperform our aggressive operational targets both in the United States and in Australia, we also continue to significantly reduce our debt,” Goncalves told analysts during a conference call Thursday.
At this time last year, several Iron Range companies such as U.S. Steel and Magnetation were idling or planning to idle plants as the steel industry was in the middle of a historic downturn.
But “the steel market in the United States has started to show consistent signs of a real recovery, with a direct positive impact on our steel clients’ order books and, consequently, a totally expected improvement in our clients’ appetite for the [iron ore] pellets we supply them,” Goncalves said Thursday.
“With Northshore back in operation in the second quarter, United Taconite restarting later this year, and a very efficient and cost-competitive [Asian Pacific Iron Ore] business, Cliffs is well-positioned to fully benefit from all the initiatives implemented since August 2014, and deliver a strong financial performance this year,” he said.
U.S. Steel, which owns the Keewatin Taconite and Minntac operations in the Iron Range, was not as positive after reporting losses for its first quarter. And while conditions have improved somewhat in the last few months, the company said continued importing of underpriced steel, especially from China, continues to hurt the company. It also filed a complaint with the International Trade Commission, asking for imports from China to be blocked because entities there stole some trade secrets. China denies the claims.
Over the past few years, China is believed to be the biggest offender of illegally dumping iron ore priced 20 to 50 percent below most other producers, as the steel industry there has imploded.
Overall, the imports of underpriced steel and iron ore is slowing since President Obama and Congress instituted higher U.S. trade tariffs, said U.S. Sen. Amy Klobuchar.
The tariffs strengthen the penalties for dumping underpriced steel in the U.S. from China, Brazil, India and other countries.
The tariffs can increase importers’ costs by more than 200 percent, Klobuchar said.