Cliffs to reopen Northshore Mining in May

The Northshore Mining processing plant in Silver Bay loads directly onto ore ships on Lake Superior. (PHOTO: Eric, Flickr CC)

Northshore Mining operates its own railroad connecting its mine near Babbitt, Minnesota, to its processing facility in Silver Bay on Lake Superior (PHOTO: Eric Jacobi, Flickr CC)

Cliffs Natural Resources announced today it plans to reopen Northshore Mining in Babbitt and Silver Bay by May 15.

About 540 people work for Northshore Mining, most of whom have been laid off since last year.

“The avalanche of unfairly traded steel hitting the U.S. since last year negatively affected our clients’ production levels and, as a consequence, affected us,” said Lourenco Goncalves, Cliffs CEO, in a statement. “At this time, with the trade cases approaching their final stages and preliminary duties being announced, the volume of unfairly traded steel is starting to subside. As our clients’ order books improve and their need for pellets approach more normal levels, we are pleased to announce that we are bringing back to work our dedicated employees at Northshore.”

Northshore Mining is the lowest cost producer on the Iron Range, so of the three mines shutdown for the past several months it was most likely to reopen first.

Cliffs did not announce plans to reopen its other idled mine: United Taconite near Eveleth. It does, however, continue to operate Hibbing Taconite, which has not been idled during this downturn.

U.S. Steel had also idled Keewatin Taconite. It continues to operate Minntac, the state’s biggest mine, at normal levels.

ArcelorMittal’s smaller Minorca Mine in Virginia is the only Iron Range mine that has never slowed or shut down during the supply glut and low prices of the past year.

Northshore Mining is the only Iron Range mine that is not unionized. Another aspect that makes Northshore first to reopen is that, of the shuttered mines, it is the only one currently able to produce value-added iron products for commercial orders.

“In 2015, Cliffs developed at Northshore Mining a new product, the DR-grade pellets used as feedstock to DRI production,” said Goncalves. “As we restart operations at Northshore in May, we will also resume the production of DR-grade pellets destined to [electric arc furnace] clients.”

Cliffs had announced plans to producer higher grade pellets at United Taconite last year. Last I had heard from workers on site was that the expensive equipment had yet to arrive and one of the two major kilns was still badly in need of repair.

There are two parts of the Iron Range mining crisis. First is the short term crisis of foreign steel dumping that had slowed orders. As Goncalves indicated, there is evidence that crisis is beginning to subside.

Then we have the long term crisis over the fact that most Range mines can’t produce ore for electric arc furnaces, the only kind of furnaces being built anymore. Coupled with a global glut of supply of iron ore, this continues to pose a threat to longterm survivability for most Range mines.