Magnetation announces ‘indefinite idle’ of Keewatin plant

Magnetation 4

Magnetation is a scram mining and iron ore processing company on the western Mesabi Iron Range. The company uses a patented process to extract iron ore from old waste rock dumps and is also exploring other ways of mining previously untapped sources of iron ore in the region.

After Mesabi Nugget announced a “warm idle” a couple weeks ago, another Iron Range iron ore producer announced an old fashioned “cold idle” today. Magnetation, the scram mining and iron concentrate producer based in Itasca County, announced today it would indefinitely shut down its Plant One facility near Keewatin.

The plant, Magnetation’s smallest, will be maintained to reopen once iron ore market conditions improve. Some workers will be absorbed into the company’s other operations, while an yet undetermined number will be laid off.

Taconite, iron concentrate, and refined iron pellets have seen a precipitous drop in prices as the steel market goes through what was seen as a widely anticipated global slow-down.

The cyclical nature of the business is nothing new to Northern Minnesota’s Iron Range or its people. Nevertheless, this is another signal that a period of contraction is coming. The smaller plants are being affected first, but within two years there could be similar idling at larger taconite plants if these market conditions continue.

Here’s the Magnetation press release:

Magnetation LLC Announces Indefinite Idling of Plant One Iron Ore Concentrate Facility

GRAND RAPIDS, MN, February 23, 2015 – Magnetation LLC (Magnetation) announced today that due to low global iron ore prices it will indefinitely idle its Plant 1 iron ore concentrate facility located in Keewatin, MN by the end of March 2015, placing the plant on a care and maintenance program. The global price of iron ore has fallen by more than fifty percent over the past 18 months.

“Due to the unprecedented collapse in iron ore prices over the past year and the iron ore market uncertainty moving forward, we believe it is in our best interest to indefinitely idle our highest cost operation,” said Larry Lehtinen, CEO of Magnetation. “There is no way to know how long global iron ore prices will remain at the present depressed levels and consequently we are unsure of the duration of this idling. Some affected workers and staff may have opportunities to be employed by other areas of the company and we will be working closely with the appropriate governmental agencies to assist the employees who will be laid off as a result of this unfortunate event.”

Plant 1 was scheduled to produce 350,000 tonnes of iron ore concentrate in 2015 and is Magnetation’s smallest and highest cost operation. The Plant 1 idling is expected to improve Magnetation’s cost competitiveness without an impact on the Company’s ability to fulfill customer needs. The iron ore previously produced by Plant 1 will be replaced by increased production at the Company’s other operations and outside purchases.

Magnetation also owns and operates Plant 2 located in Bovey, MN and Plant 4 located in Grand Rapids, MN. Plant 4 began operating in the fourth quarter of 2014. Magnetation also owns and operates a 3.0 million tonne per year iron ore pellet plant located in Reynolds, IN.


  1. Indefinite idle used to be called a shut down. Mining has been cyclical for as long as I can remember, the only positive is the yrs of working out number the shut down periods by a huge margin. So hard on the workers when through no fault of their own they are not allowed to work. I hope the demand for steel goes up soon and the miners can get back to work.

  2. Magnetation are the bums who pushed a law through the Legislature to exempt “fugitive emissions” from air permitting.

  3. Alan…what in the world does managing a business to meet the demand of their product have to do with the elected representatives of the people passing a law the people wanted?? Add some value, stay on topic for Pete’s sake…

  4. Fugitive emissions??? Is that like rogue cow flatulence??? I have a real problem with those rogue cows passing wind all over and causing this terribly warm weather we’ve been having.

  5. YoungRanger32 says

    Oh well, there is always unemployment. Besides that maybe this idle will give Highway 169 between Keewatin and Virginia a break from Going To Hell! In my lifetime of being on the Range I have never seen 169 in as Bad of shape as it is now and it’s not even that old! I think it would be safe to say that all of Magnetation’s Trucks have contributed a lot to the terribly rough highway that we all have to drive our vehicles on now! It’s actually becoming unsafe to drive over by Buhl and it’s putting wear and tear on our vehicles that we don’t deserve. Moguls anybody? Maybe the idiots running this state into the ground should look at raising the taxes on these rich massive corporations who are putting the majority of the wear and tear on our highways! Don’t be raising the gas tax on everybody you dummies! Then maybe in the future they could build a designated 3rd lane for heavy trucks to drive on in the rural parts of 169. It would be a lot better than having to redo entire highways constantly.
    It’s also Unbelievable that we have this Resource Rich / Tourist area up here, but yet the median income is between $30-$35k a year and we have more poverty and assistance programs than most areas throughout the state and country. So rich, but yet so poor. I mean the Town of Hibbing has lost 1000 people in the last decade! This area has turned into a mini-Detroit! Empty buildings and very few opportunities is all most people are seeing here.

  6. YoungRanger32…
    You summed up the problem in your first sentence, better than you realize – “Oh well, there is always unemployment”.

    The “oh well” sums up the attitude of far too many of today’s young rangers. And the “there is always unemployment” sums up the the major reason many young rangers have had their spirit and initiative destroyed by massive, socialistic government policies.

    Those evil policies entice our young to do nothing, stay put, not stretch themselves to find their God given talent and exploit those talents to the benefit of themselves and society at large.

    Magnetation should not only be the least of your concerns, you should consider them a blessing.

  7. Tom Chimebarth says

    There wouldn’t be young rangers without massive , socialistic government policies .

  8. YoungRanger32 says

    I agree with you guys to an extent. I am not anti- mining. The problem I have is that we have all of these resources up here, but this entire area has gone down hill and been taken over by people from out of the area and the money is leaving the area more so than ever. You guys need to understand that First we had Capitalism in this country and that was regulated to not allow Monopolies to take control of everything. It was then deregulated which in turned lead us to Corporatism (corporate monopolies to be more specific) is now the engine which has driven us to socialism. Then communism comes next. So as large retail Corporations Expand and their profits increase so does the demand for help and government assistance. Many corporations don’t pay living wages and just trade jobs for jobs or jobs for less jobs.

    Take Walmart for example, they sell almost everything most people need including liquor over at the store in Virginia. Supposedly Walmart Inc made 18 billion dollars last year and look what they do to the local economy. Even look at mining and how it’s been booming for the past 5 years and look at our area. It continues to decline business wise, enrollment wise, and population wise. My God Zimmy’s is even closed along with a lot of other businesses.

  9. More examples of the Dunning-Kruger effect here than I might find in a bar at 6:30 PM. First, almost all mining/resourced based communities look like this, with a high gap between those benefiting from the industry and those not. And, adding the pleasant environment surrounding the communities, outsiders don’t really wish to live here. Blaming government for the faults of state-corporatism is simply a red herring. The state of Minnesota, frankly, has done nothing but subsidize and develop the industry, including the current research to solve the sulfate/mercury problem, with an occasional attempt at forcing them not to destroy the place entirely. That particular division of NRRI, including the Coleraine minerals lab exists as the research arm of the industry. If one added all the other true costs of mining, one might find that it is actually costing money to state taxpayers, much like the infamous Mercedes Benz plant in Alabama. This is what the corporate state looks like in its reality. Socialism does exist, but it exists for corporations, the wealthy, the co-opted or the connected, and not for most ordinary people who must must endure “nature by tooth and claw”, unlike Wall Street Bankers, Mining executives and revolving door specialists such as Doug Johnson. The complaints here about the pittances the unfortunate, the mentally ill, the addicted or the lazy receive are a nice diversion from the real welfare state, such as IRRRB, the state support for mining or the support for the disintegrating logging industry. What you must realize is that you are nothing more than a future White Pine, MI, Anaconda, MT or Libby,MT; you and your community are expendable resources, just like those holes in the ground out the back door. You will be left, just like those communities, to clean up the environmental and social mess while you lament the former theft and blame environmentalists, much like the German stab in the back theorists after the World War 1. This is what really existing resource based economics looks like. Enjoy the results.

    • HI Paul. I agree with some of your views, probably nearly all of them. I appreciate your passion. But I do not see a Dunning-Kruger effect. I see people that care and are trying their best to communicate ideas and feelings. Everyone’s perception is equal. You sound like you are saying that you know more than some other people and so their view is less valid. Maybe their life experience gives them a different perception, or a different method to communicate their perception. Honestly, I believe most of the people commenting on Aaron’s site are routinely saying the same things when it comes to the important stuff. They are just coming from different frames.

      We should be focusing on the issues where everyone agrees. Everyone agrees IRRRB needs a kick in the ass. Everyone agrees the politicians suck. Maybe there is an opportunity to put irrelevant ideological differences aside and work on those issues.

      Besides, there are positive developments as well. The broadband thing is recent news and that is a great step. And, we should be trying to encourage more discussions, hopefully even essays, not repelling people by policy wonkin’ or intellectual snobbery.

    • Independent says

      It must be difficult being that intelligent. However since you are anti mining you must have used telepathy to submit this post. You wouldn’t use the tons of Iron, copper and other minerals that were required to get that gem of knowledge from your head through a computer or device powered by electricity onto a network, through a server and displayed on my screen… Wait a second, Paul you didn’t did you…

  10. Wow Paul….you’re outlook on life is more miserable than most. I’ll pray that you find some enjoyment before it ends. God bless…

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