Magnetation warns union of plant shutdown in 2016

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)

Today, Magnetation announced it has warned its union that it will likely shut down one of its Iron Range iron concentrate plants on or after Jan. 31, 2016. Fifty More than 160 employees could be laid off or otherwise affected for longer than six months.

Magnetation, based in Grand Rapids, Minnesota, is a scram mining operation on the Mesabi Iron Range with a iron ore pellet plant in Reynolds, Indiana. Like other iron ore producers it has been reeling under the market pressures of low iron ore prices around the world and a glut of supply.

The plant in question is Mag Plant 2, the one near Trout Lake outside Bovey and Coleraine on Highway 10. Magnetation uses its unique process of extracting marketable iron ore from mining waste dumps dating back to the early days of the Mesabi. It then trucks the ore from each of its sites to the Jesse mine load-out station, where it is tracked to Indiana or other customers.

Magnetation has scram mining plants near Keewatin, Grand Rapids and co-operated a plant near Chisholm.

Here is the press release:

GRAND RAPIDS, Minn.Nov. 18, 2015 /PRNewswire/ — Magnetation LLC (Magnetation) announced today that it may implement a temporary production curtailment at its Plant 2 facility located at 27968 County Road 10, Bovey MN 55709. If necessary, any production curtailment would occur on or after January 31, 2016.

The announcement initiates compliance with the U.S. Department of Labor’s Worker Adjustment and Retraining Notification (WARN) Act by notifying local officials and the International Union of Operating Engineers Local 49 of production curtailments and employee reductions.  WARN Act notification is required 60 days in advance under certain circumstances when there is a potential for layoffs of more than 50 employees for a period in excess of six months.

“While any operating curtailment is unfortunate, we must balance our current production with our customers’ needs to sustain our business in these challenging markets.  In response to this market uncertainty, we must acknowledge that there is a potential for curtailments and layoffs. As a result, we are communicating the proper notifications to our employees and the community,” said Larry Lehtinen, CEO of Magnetation.  “At this time, there is no way to know how long this potential curtailment may last, but we are hopeful that Plant 2 production would resume in 2016.  Some employees may have opportunities within other areas of Magnetation. We will be working closely with the appropriate governmental agencies to assist any affected employees who would be laid off if this operating curtailment is enacted.”

It’s been a week of bad news on the Mesabi. Yesterday, Cliffs Natural Resources announced both Northshore Mining in Babbitt and Silver Bay and United Taconite in Eveleth would be shut down at least through March 2016. A long term market slowdown in iron ore is expected for the next few years.

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