U.S. Steel to idle Keewatin Taconite, affecting 400 workers

The entrance to Keewatin Taconite, a U.S. Steel mine on the western Mesabi Iron Range. (PHOTO: City of Keewatin)

Entrance to Keewatin Taconite, a U.S. Steel mine on the western Mesabi Iron Range. (PHOTO: City of Keewatin)


Today, U.S. Steel announced it will idle its Keewatin Taconite mine and processing plant in 90 days. The mine employs more than 400 people and produces about six million tons of taconite pellets annually. With about five million tons stockpiled on the property this shutdown could last several months unless market conditions improve dramatically.

On that front, the news is grim. Taconite prices hit a six-year low yesterday at $57.70. As I predicted in this recent post here at MinnesotaBrown when the price falls further below $60 it portends shutdowns at Iron Range mines. Keewatin Taconite announced its May 13 shutdown today, but others may follow in coming weeks unless prices rebound.

Shutdowns are a regular part of life on the Iron Range, and they usually don’t last more than a couple months. But longer shutdowns happen when there is a glut of supply and flagging demand. A source familiar with U.S. Steel’s plans told me that 5 million tons of ore are sitting on the ground at KeeTac. That’s almost a year’s worth of taconite pellets.

Keewatin will continue to operate for 90 days. Contractually, the company has to warn its labor force for shutdowns of this kind. So come June, the plant will idle for an unknown period of time — likely through the summer, if not longer.

In a March 11 Daniel Palmer story in the Australian Business Spectator some, such as Cliffs CEO Lourenco Goncalves, blamed low prices on foreign iron ore giants BHP, Rio Tinto and Vale keeping up massive production despite a flat demand. Another major producer, Australia’s Roy Hill Project, is due to come online later this year as well, adding 40 million tons of supply.

Why? Roy Hill feels it has position to corner the market when ore prices come back. But that market position will likely come straight out of the hide of Minnesota’s taconite industry, to the chagrin of Cliffs and U.S. Steel alike. That’s one reason you’re seeing such earnest talk of DRI and value-added ore products from traditional mining operations; It’s one way for American producers to compete with lower costs in the swelling global market.

Meantime, here on Minnesota’s Iron Range we brace for another economic setback, an experience disturbingly routine within our cultural memory.

UPDATE: I’ll be on Minnesota Public Radio’s Morning Edition Friday morning at 7:20 a.m. talking to Cathy Wurzer about the state of the Iron Range and taconite amid the news about Keewatin Taconite. (Interview archived here).

Iron Range lawmakers have issued statements since the announcement this morning.

Rep. Carly Melin (DFL-Hibbing):

“This is difficult news for so many of my friends and neighbors whose families earn a living at Keewatin Taconite. Over the last few years, foreign countries have flooded the world’s steel markets with cheap steel, undercutting the American steel industry which in turn has threatened mining on the Iron Range. I am in contact with the president of USW Local 2660 at KeeTac and will be available on the Range tomorrow and over the weekend to meet with workers who have questions. I will do everything I can to ensure these workers are connected with the Dislocated Worker Program at the Department of Employment and Economic Development and have access to unemployment benefits.

“Unfortunately, this situation is not an unfamiliar experience for the Iron Range. We will get through this by working together to get Keewatin Taconite back up and running and taking care of the workers in the meantime.”

Rep. Tom Anzelc (DFL-Balsam Township:

“I felt for some time that eventually the global market, the cyclical natural of iron and steel, and the unfair high level of imports, and unfair trade policies would affect the Mesabi. After discussion with several mining companies, I worried 2015 and 2016 would be extremely difficult for the Range. My concerns were realized starting with the idling of Magentation Plant One, now KeeTac.

“Keewatin is my home mine. It is where I worked as a young man. But like all Rangers, we are going to be strong, resilient, and hopeful that this is a temporary idling; that we will recover production and the jobs will come back.

“From a state perspective, my job is to see that after the layoffs begin on May 13, the state will respond rapidly with the unemployment benefits to which these workers are entitled. I will urge the Minnesota congressional delegation to address unfair trade policies and unfair dumping of international steel in the domestic market place.

“Lastly, this is about Range families and Range jobs. We need to be strong and we need to help each other.”


  1. Tough news.

    Aaron, do you know of any good pieces explaining what’s considered to be unfair in the iron market by the industry in MN? For example, do production costs vary in the international market due to ease of extraction, labor costs, regulations, transportation to big users, government subsidies, etc.?

    • Hi Ed – Good question. All of those factors are at play. Domestic steelmakers resent imports because they often come from nations that produce much more iron ore, paying less for labor and little in the way of environmental regulation. These producers can produce more ore than is prudent in the marketplace with relative impunity, driving down the price for everyone and making it harder to actually make steel. That’s why you see the Cliffs CEO going full Jennifer Lopez in that Australian article I linked.

      I wish I had an authoritative link at the ready, but that’s my own understanding talking to iron ore people over the last 15 years.

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