Minnesota’s troubled Iron Range took another hit Wednesday as the bankruptcy-burdened Magnetation LLC warned that it could idle its taconite plant in Bovey, Minn., on Jan. 31, affecting 163 employees.
The news comes on top of Cliffs Natural Resources’ Tuesday announcement that it was idling its Northshore Mining operations in Silver Bay and Babbitt, laying off most of the 540 employees there in December.
Magnetation already has idled its Keewatin plant this year.
“At this time, there is no way to know how long this potential curtailment may last, but we are hopeful that Plant 2 production [in Bovey] would resume in 2016,” said Magnetation CEO Larry Lehtinen. “We will be working closely with the appropriate government agencies to assist any affected employees who would be laid off if this operating curtailment is enacted.”
The news came in a Worker Adjustment and Retraining Notification (WARN) filing the company was required to make with the U.S. Department of Labor.
Between Magnetation, Cliffs, U.S. Steel and Steel Dynamics, more than 1,500 workers already have been laid off this year on the Iron Range.
Mark Phillips, commissioner of the Iron Range Resources and Rehabilitation Resources, said this is the worst downturn to hit Minnesota’s taconite industry since the 1980s.
“There is just a glut of iron ore in the world,” he said. “It’s the first time in my memory where the U.S. economy is relatively healthy and that the steel and iron industry is in this bad a shape. Usually, we ride with the economy. That is the sad point about this.”
Gov. Mark Dayton this week renewed his call for a special legislative session to provide jobless benefits to the laid-off Iron Range steelworkers and has received support from DFL Senate Majority Leader Tom Bakk.
Phillips and others point to a swell of cheap steel imports from other countries, especially China. Taconite, which is mined iron ore converted into concentrated pellets, is a key ingredient to steel.
This year, global iron ore prices sank to historically low prices, hurting the profits of companies such as Magnetation, Cliffs Natural Resources, U.S. Steel and Steel Dynamics.
U.S. Sens. Amy Klobuchar and Al Franken, both D-Minn., have been lobbying for a host of new trade protections that will swiftly penalize countries for illegal steel dumping.