Minntac lays off 260 miners

Reclaimed mineland near the the Minntac plant in Mt. Iron, MN, in 2015. PHOTO: James St. John, Flickr CC

Less than 24 hours after announcing that a Canadian steelmaker was buying a quarter share of Minntac, U.S. Steel announced 260 layoffs at the largest iron mine in the U.S.

The layoffs provide a clearer picture of the tumultuous situation in the U.S. economy and North American steel markets. We now see that U.S. Steel needed fast cash when it sold Stelco the $100 million option to buy $500 million worth of Minntac by 2027.

Minntac will trim production and reduce its workforce but remain open. It still needs to fill orders, including those from Stelco. It’s not a plant closure, which is good, but any uncertainty at Minntac is broadly indicative of a declining situation for all Mesabi Iron Range mines.

Three of the Range’s six mines will be idled for the early summer. Among them: U.S. Steel’s Keewatin Taconite, Cleveland-Cliff’s Northshore Mining, and ArcelorMittal’s Hibbing Taconite, a mine partially owned by Cliffs and U.S. Steel.

Clearly the three big iron mining companies have circled their wagons around their remaining production facilities — Arcelor at Minorca in Virginia, Cliffs at United Taconite in Eveleth, and U.S. Steel at a slowed-down Minntac in Mountain Iron.

COVID-19 is, of course, a major factor in this economic slump. Stay-at-home orders all over the world destroyed both production and consumption of steel products.

But these closures were not spurred by public health demands. Steel production is considered essential manufacturing. Rather, these moves are the result of declining demand for steel. Only a recovering demand for steel will reopen all the plants.

Best case scenario is a period of two months where most mines lay off workers, but then return before unemployment benefits run out.

Worst case scenarios include bankruptcies and permanent restructuring that could eliminate jobs. We’re not there yet.


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