Cleveland Cliffs idles Northshore Mine until Aug. 15

PHOTO: Eric Jacobi, Flickr CC

Cleveland Cliffs announced today it would idle its Northshore Mining operations in Babbitt and Silver Bay until at least Aug. 15.

This becomes the first mine shutdown announced since the economic recession caused by COVID-19. Cliffs will also shutter its Tilden Mine in Michigan’s Upper Peninsula.

Cliffs recently completed its takeover of AK Steel, but was forced to idle some of its newly acquired steel mills amid coronavirus concerns and weakening demand. The company’s new hot briquetted iron (HBI) facility in Toledo, Ohio, was set to be completed later this year. Cliffs halted construction last month.

Northshore is the only non-union iron mine in Minnesota. It also sells taconite on the open market rather than to an internal customer. Both factors allow quick changes to operation plans.

The Mesabi Daily News reports that about 100 workers will be kept on to maintain facilities, but that the remainder of Northshore’s 570 employees would be laid off.

Cliffs also owns and operates United Taconite in Eveleth and is minority owner of Hibbing Taconite.

Bad news only beginning

Late last week U.S. Steel announced it would idle its enormous Gary Works, one of the nation’s biggest blast furnace facilities. It had already suspended work at two other mills before that. U.S. Steel operates Minntac, the state’s largest taconite plant, and Keewatin Taconite. It is also a minority owner of Hibtac.

The other big mining company on the Iron Range is global giant ArcelorMittal, which owns Minorca and is majority owner and operator of Hibbing Taconite. ArcelorMittal, too, has idled steel plants around the world.

As I wrote on Sunday, this information all points to Northshore being the first, but not the only Iron Range mine to experience work stoppages this summer. It might take longer for companies who use their own ore to make steel to halt production. But a protracted recession would all but assure they reach that point.



  1. The rolling disaster in the shale oil industry in the US is probably a preview for the mining industry in MN. Our mines are now well enough capitalized (I hope) to avoid the bankruptcies that are now roiling the oil business. However, the shale oil experience illustrates the fate of “highest cost” providers in the face of significant downturns. With demand and prices for iron and steel and copper and nickel near two-decade lows, more mines most likely will be shutting down operations as Aaron notes, and the copper mine companies are undoubtedly very happy they have not come on line yet. Environmentalist and tribal opponents have done Glencore and Antofagasta a huge favor, since they have inadvertently protected them from the financial pain of sitting on billion-dollar idled operations. Given its worldwide situation and high leverage, and the fact that it skated close to bankruptcy a few years ago, Glencore may be in trouble enough from its existing operations to feel relieved that they are not open in MN.

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