Cliffs vows ore for Hibbing Taconite, plans for Nashwauk

On Friday, Sept. 14, Cleveland-Cliffs CEO Lourenco Goncalves points out his company’s land, seen in yellow on the map, near the former Butler Taconite site in Nashwauk. (PHOTO: Fox 21 screenshot)

Cleveland-Cliffs CEO Lourenco Goncalves still wants to mine iron ore near Nashwauk. He vows that Hibbing Taconite will always have enough ore from his company, if they need it.

Further he says Northshore Mining continues to make progress with direct-reduced iron products. Finally, he predicts smooth contract negotiations between his company and the United Steelworkers.

All of this came from a Friday afternoon press conference at United Taconite, a Cleveland-Cliffs mine in Eveleth. It was a hodgepodge of company news, all of which fed a growing narrative of change, opportunity and uncertainty in Mesabi Iron Range mining.

The same impasse remains. Cliffs wants a permit to mine its Nashwauk land, but that permit is currently tied up with Mesabi Metallics and its new investors. Further, Gov. Dayton and the Minnesota Department of Natural Resources say simply giving that permit to Cliffs would be legally problematic.

Goncalves established his ideal timeline. Cliffs wants to mine first, producing iron ore concentrate for other mines, presumably Hibbing Taconite. Then it wants to build its second hot-briquetted-iron (HBI) plant on the Nashwauk site. This would produce high quality iron for use in newer electric arc furnaces. Then, Goncalves says, he would build a pellet plant on the site as well.

But Goncalves doesn’t want the Mesabi Metallics project. He views the incomplete plant structures, bleached in the summer sun and winter winds, as little more than scrap metal.

Naturally, Mesabi Metallics disagrees with this assessment, arguing it will in fact finish the plant and begin mining on site.

The good market won’t last forever. As I pointed out in a column last week, corporate stockholders are hungry for profits, making capital investments more rare than they used to be.

That’s why this situation is so frustrating. Mesabi Metallics has legal rights, but Cliffs has money ready to spend.

Some other observations:

Goncalves said Cliffs resigned from managing Hibbing Taconite because the company has become too small. Their goal is to become an efficient producer of its own iron ore products. But it’s interesting to see that they seem to expect they’ll supply iron ore to Hibbing. This could be part of a broader restructuring of the Hibbing Taconite company, owned mostly by ArcelorMittal with U.S. Steel and Cliffs as minority owners.

It sure seems like Cliffs will settle with the Steelworkers union quicker than ArcelorMittal or U.S. Steel.

Northshore, the only non-union mine on the Range, continues to be a low-cost horse for Cliffs, now producing its own style of higher-iron pellets for the marketplace.

Ownership changes and reorganization are nothing new to the Iron Range mining industry. But it feels like the confluence of new technology, a surging economy (that won’t last forever), and aging infrastructure will produce big changes. And probably soon.


Speak Your Mind


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