Northshore Mining back to work early

U.S. Sen. Amy Klobuchar with Northshore Mining workers at the taconite processing plant in Silver Bay. (Cliffs via WDIO)

U.S. Sen. Amy Klobuchar with Northshore Mining workers at the taconite processing plant in Silver Bay. (Cliffs via WDIO)

Northshore Mining has called back workers early to reopen production of taconite at its Babbitt Mine and Silver Bay processing facility. The mine had previously announced it would reopen in mid- to late-May, but is ahead of schedule.

WDIO reported on the news when U.S. Sen. Amy Klobuchar (D-MN) made the announcement after a tour of Northshore on Thursday.

Northshore Mining operates its own railroad connecting its mine near Babbitt, Minnesota, to its processing facility in Silver Bay on Lake Superior (PHOTO: Eric Jacobi, Flickr CC)

Northshore Mining operates its own railroad connecting its mine near Babbitt, Minnesota, to its processing facility in Silver Bay on Lake Superior (PHOTO: Eric Jacobi, Flickr CC)

Northshore, which is operated by Cliffs Natural Resources, was one of three Iron Range taconite plants that spent much of the last year shut down amid a global steel downturn. Cliffs hopes to reopen United Taconite near Eveleth if a big contract comes through. U.S. Steel’s Keewatin Taconite faces longer odds on the western Mesabi. The word from some of the laid off miners is that U.S. Steel has pulled a lot of equipment off the Keewatin site and that it would take several months to reopen. It’s also widely believed that U.S. Steel is shopping for a buyer for KeeTac, which used to be National Steel.

U.S. Steel is also leading a rather bold movement to halt all Chinese steel imports, which I compared to Rooster Cogburn’s foolhearty charge against Lucky Ned Pepper in “True Grit.”

Of course, the Essar Steel Minnesota project — half complete and now stalled out again — remains unresolved. Several Magnetation facilities remain idled as well, along with a Mesabi Nugget plant that will likely stay closed for years, if it ever reopens at all.

But Northshore, widely believed to be the lowest-cost producer of iron ore in Minnesota, was always likely to reopen. It’s the only non-union mine on the Range and controls its own loading facility on Lake Superior. In fact, I would argue that Northshore’s model of shipping raw material by rail to a cost-effective plant is going to become a model for the rest of the region as the industry continues to cut costs and consolidate.

Fewer plants, fewer workers, quite possibly producing the same amount of ore. Maybe not all this year, but this seems likely over the next five years.

Meanwhile, for workers in Babbitt and Silver Bay, some relief from a difficult year of unemployment and worry.

Comments

  1. Ranger47 says

    Klobuchar “made the announcement”??? Come on Aaron. Amy had nothing to do with reopening Northshore Mining nor was she any part of the decision making process to do so.

    She then shows up for a political photo op…and repeats the decision made by Goncalves months ago and SHE claims some kind of victory. It’s all typical DFL/Klobuchar b.s.

  2. clarification says

    “But Northshore, widely believed to be the lowest-cost producer of iron ore in Minnesota…”

    Not sure where you got that information. Northshore only produces ~5 MT/year and has the oldest plant on the range. MinnTac and HibTac will beat Northshore on pellet price anytime due to the efficiencies of scale and the age of their plants. Northshore also has the unfortunate title of hardest ore on the range (and maybe the world) which takes much more energy and consumables to process than plants on the west side.

    Also rail adds a significant cost to processing. Think about it. Say you have ore that has 25% magnetic iron-the stuff that makes taconite. That means if you mine it and rail it-you’re not only paying to rail your ore but you are mostly paying to rail your waste (3/4 of the cost). Plus most of the processes are specific to their ore body and would likely need lots of retrofitting to process ore from another mine. Not saying that this won’t happen, but there are definite cost/infrastructure disadvantages.

    • I had heard differently, but your argument is certainly logical. Actually, I’ve heard tales of Cliffs telling each of its mines a different story so that each firmly believed they needed to reduce costs or die. I’d love a good look at all the books. Not sure they’ll do that. 🙂

      • Gray Camp says

        I was going to question the same thing as clarification, but don’t know the answer for sure. My belief has always been that because of the extra transportation handling costs, Northshore was one of the least efficient pellet producers and that at least MinnTac and HibbTac were more cost effective than Northshore. I have heard directly from the guys at Tilden claim that they have the lowest cost pellets of the Cliffs mines, but that isn’t Minnesota. I am holding out a glimmer of hope that Essar will eventually put in their steel mill, so that we can potentially see the monetary benefits of transportation and handling costs by putting a mine, processing plant, and steel mill on the same piece of land.

      • I live near Silver Bay, and I’ve heard the “lowest cost producer” line many times myself. I’ve often wondered if it’s true. If it is truly the lowest cost producer, it might ge because its non-union, and relies heavily contractors – Van House Construction, among others – that pay $15-16/hour with no benefits.

  3. Gray Camp says

    Should we or should we not be excited about 540 miners in the region being called back to work?

    • I think people affected would be very excited. Actually, relieved is probably the better word.

      • Gray Camp says

        Definitely the miners. I’d think we should all be excited that there are 540 more families on the region who could be on the road towards stimulating the regional economy by being able to spend money on items other than the bare essentials.

Speak Your Mind

*

This site uses Akismet to reduce spam. Learn how your comment data is processed.