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Serving Northern St. Louis County, Minnesota

Northshore will shut down by Dec. 1

No timetable announced on worker call-back

Marshall Helmberger
Posted 11/18/15

REGIONAL—The downturn in the global metals market has claimed more victims on the Iron Range. Cliffs Natural Resources, on Tuesday, announced it will temporarily idle its Northshore Mining …

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Northshore will shut down by Dec. 1

No timetable announced on worker call-back

Posted

REGIONAL—The downturn in the global metals market has claimed more victims on the Iron Range. Cliffs Natural Resources, on Tuesday, announced it will temporarily idle its Northshore Mining operation by the end of the month, laying off most of the 540 employees who work at the mine, near Babbitt, or the company’s processing facility in Silver Bay. A few dozen of those employees will likely stay on the job for maintenance duties, according to a statement issued by the company.

Cliffs had announced the idling of United Taconite back in August and company officials said they now expect that both Northshore and United Taconite will be remain idle through the first quarter of 2016.

Meanwhile, Cliffs will continue to operate Hibbing Taconite, as well as the Tilden and Empire mines in Michigan, at normal rates.

Cliffs is making its move in hopes of preserving cash in the face of the ongoing decline in the metals market as global supply outstrips demand. Cliffs CEO Lourenco Goncalves said the situation, combined with lax enforcement of restrictions on imported steel, was contributing to a slowdown in demand from domestic customers. “Our pellet inventory is currently at a seasonally, historic high level. As a result, we are taking this action to work off our pellet inventory pending receipt of our customers’ tonnage requirements for 2016, which have not been finalized.”

Goncalves said resolution of ongoing steel dumping cases should improve conditions in the first half of next year. “As soon as the unfairly traded steel problem subsides and domestic steel production recovers to normal levels, we will be able to immediately ramp up iron ore pellet production by bringing idled capacity back to operation,” said Goncalves.

Political reaction to Cliffs’ latest announcement was swift. Congressman Rick Nolan called it “terrible news” and said timing was particularly bad, coming just ahead of the holidays. “Our first thoughts are with the families and businesses affected in the Babbitt and Silver Bay areas. They’re going to need help to get through this,” he said.

Sen. Al Franken said the latest in a series of layoffs at Iron Range mines “is taking a heavy toll on families and communities throughout the region.”

Both Franken and Nolan put the blame on unfair trade practices and called for stricter enforcement of trade laws. “We’ve seen far too many families and businesses hurt because of unfair steel dumping, and I am committed to stopping the job losses and economic hurt in Northern Minnesota,” said Franken.

Nolan said the latest layoffs were more reason to oppose the passage of any additional trade deals.

“If there was ever any doubt that the Trans-Pacific Partnership (TPP) trade agreement is a job killer that should be defeated – today’s announcement should put those doubts permanently to rest,” he added. “Beyond defeating the TPP, we need to go back and reexamine every single trade agreement – beginning with the NAFTA debacle that has cost us millions of jobs and contributed to the loss of some 57,000 U.S. manufacturing facilities.”

The announced idling of the Northshore plant is just the latest in a long list of layoffs at taconite producers on the Iron Range. The latest announcement prompted Gov. Mark Dayton and state Senate leaders to call for a special session to address the situation. Hundreds of miners laid off earlier this year will see their unemployment benefits expire in early March, before the Legislature is scheduled to meet again. Dayton and fellow DFLers say they want a special session to approve an unemployment extension. Republican leaders in the House have yet to respond to the proposal.