Magnetation coming back, but Plant 1 in doubt

Magnetation is a scram mining and value added iron ore mining and processing company based in Northern Minnesota. (PHOTO: Magnetation)

Magnetation is a scram mining and value added iron ore mining and processing company based in Northern Minnesota. (PHOTO: Magnetation)

Like other Iron Range mining operations, Grand Rapids-based Magnetation was battered by the collapse in iron ore pricing and domestic steel demand last year. The homegrown Northern Minnesota company declared bankruptcy and lost ownership interest to a hedge fund amid financial restructuring.

In 2014, Magnetation had four plants running, salvaging old mining waste from decades earlier and extracting usable iron ore using a patented process they developed on the western Mesabi. Today, only the newer Plant 4 near Grand Rapids still operates, filling remaining orders for the company’s new iron pellet plant in Indiana. That plant supplies a steel mill owned by the company’s partner, nearby AK Steel.

Magnetation is currently working to emerge from bankruptcy, a prospect for which company leaders hold optimism. However, the Mesabi Daily News today reports that despite this optimism, union leaders say they’ve been told Plant 1 near Keewatin will never reopen.

Plant 1 was among Magnetation’s smallest operations and was the pilot for the other plants that were built in quick succession later.

At this point, however, any resumption of Magnetation operations and continuation of Plant 4 operations would exceed logical expectations. It’s hard to state how dismal prospects are for small players doing business on the open iron ore market right now.

The big question is what kind of Magnetation butterfly will emerge from the bankruptcy cocoon? Specifically, who’s going to own it and call the shots? How well will the partnership with AK Steel endure?

And while not everyone likes to admit it, the same could be said for the big mines along the Mesabi. For instance, miners I’ve talked to have serious doubts about whether U.S. Steel will reopen Keewatin Taconite. That plant employs at least seven times as many workers as Magnetation Plant 1.

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