Former Magnetation brass buy Canadian iron mine

The Scully Mine as seen from Wabush, Labrador, Canada. The former Cliffs Mine is being reopened by Tacora Resources, a Grand Rapids, Minn.-based company. (PHOTO: Axel Drainville, Flickr CC)

Tacora Resources, Inc., a newly formed mining company based in Grand Rapids, Minnesota, just acquired the assets to the Scully Mine in Wabush, Newfoundland and Labrador, Canada.

Cliffs Natural Resources closed the Scully Mine in 2014. The company left behind unfunded pensions and considerable animosity among the rural population of this small town in Labrador. Many of the affected workers contacted me this spring and summer as they read of Cliffs’ activities here in Northern Minnesota, pointing out the company’s controversial record on labor and legacy costs in Canada.

Tacora is led by former Magnetation CEO Larry Lehtinen. His son Matt, another former Magnetation leader, joins the company as COO. I exchanged e-mail messages with Matt last night.

“Our expected restart is a big piece of good news for an area that has experienced many of the same ups and downs that our neighbors on the Iron Range have experienced,” said Matt Lehtinen.

Lehtinen suggests that this is the first time a mining company based on the Mesabi Iron Range has purchased a operational iron mine somewhere else in the world.

“What is also really cool is that obviously the Rockefellers and J.P. Morgans of the world didn’t share anything in common with the workers and people that mined the ore, but our entire company and leadership in Grand Rapids and the people of Labrador West share common values in terms of valuing life in rural northern areas hunting and fishing snowmobiling and the like.”

Tacora will employ 25 people in Grand Rapids. The mine employed about 500 people in Wabush when it closed.

The move represents a comeback for the Lehtinens, who left Magnetation amid the controversy of a 2016 bankruptcy. That company entered Iron Range mining scene in 2008 with a scram mining operation. Magnetation’s hook was using an innovative new technology to gather pure iron ore from discarded waste piles from long shuttered western Mesabi Iron Range mines.

The initial pilots were very successful and the company expanded rapidly. Too rapidly, as the 2015 iron and steel business swamped the company’s finances after they built a major facility in Grand Rapids and an iron ore processing plant in Indiana.

Virginia state businessman Tom Clarke bought Magnetation earlier this year, aiming to reopen it under the banner of ERP Iron Ore. Clarke is also a major partner in Chippewa Capital Resources, which recently acquired the former Essar Steel Minnesota project near Nashwauk.

Meantime, the United Steelworkers and local officials in Wabush, Canada are pleased with the prospect of reopening the Scully Mine. The mine was the major employer in Wabush, which was economically devastated by the 2014 closure.

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