Magnetation facing potential Sept. 30 shutdown

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)

Magnetation, LLC, announced today it would prepare for a potential Sept. 30 shutdown of its Plant 4 scram mining operation in Grand Rapids, Minnesota, and its processing plant in Reynolds, Indiana.

Magnetation is an iron ore mining and processing company based in Grand Rapids.  The Worker Adjustment and Retraining Notice (WARN) of a potential shutdown relates to an effort to attract investors, preparing the company for several possible outcomes.

As part of the process, Magnetation entered into an agreement with its partner, AK Steel Corporation, and its lenders to prepare to cease operations and implement a wind-down process. Without additional funding or a new investor, Magnetation will close Sept. 30.

“Magnetation LLC entered into this settlement agreement to protect our stakeholders in the event an investor is not secured to emerge from bankruptcy,” said Magnetation President Matthew Lehtinen. “Now that this agreement is in place, our sole focus is to continue to safely produce and ship high quality pellets until the operations potentially shutdown and work closely with several interested parties that are currently evaluating an investment into Magnetation LLC to avoid a shutdown of our plants.”

Essentially, the cash-strapped company is fighting for survival and needs flexibility as it courts future investors. Lehtinen said something is in the works.

Magnetation will continue normal operations until Sept. 30, turning waste rock from old iron Minnesota mines into a unique iron concentrate used in Indiana steel mills. In the steel downturn of the past two years, Magnetation had already idled its other plants in Northern Minnesota.

The company is a good example of an innovative concept that entered the market at just the wrong time. The market for iron remains fragile and complicated, despite recent price increases and the reopening of two idled Minnesota taconite plants.

For hundreds of families on the western Mesabi, hopes run high that the company has something up its sleeve to stay open.

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