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Business and Economic News
Dan Kraker
Duluth

Cleveland-Cliffs extends closure of Northshore Mining until April

The Northshore Mining plant sits idle.
The Northshore Mining plant will continue to be idled until at least April 2023 under an announcement from owner Cleveland Cliffs.
Derek Montgomery for MPR News File

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Cleveland-Cliffs, which operates four taconite mines and processing plants on Minnesota’s Iron Range, announced Friday it plans to keep its Northshore Mining facility closed until at least April, 2023.

Cliffs first idled Northshore on May 1, resulting in the layoff of about 410 of the 580 employees who work at the open pit mine outside the small town of Babbitt and the giant pellet plant along the shore of Lake Superior in Silver Bay.

The company is embroiled in a royalty dispute with Mesabi Trust, which owns the mineral rights where the iron ore is mined.

In a conference call with investors, Cliffs CEO Lourenco Goncalves said with the increased use of scrap at its steelmaking facilities, it doesn’t need the taconite pellets produced at Northshore at this time.

“We are extending the ongoing idle at our Northshore swing facility until at least April of next year,” Goncalves said.

"Rather than deplete this finite resource for the benefit of the Mesabi Trust ... we'll keep Northshore idle until we decide otherwise."

Three years ago Cliffs spent more than $100 million to upgrade the Northshore facility in Silver Bay to produce DR-grade pellets, which are used to make a kind of iron ore feedstock that’s needed to supply electric arc furnaces, a newer kind of mill that now dominates the nation’s steel industry.

But Cliffs has since shifted its DR-pellet production to the Minorca Mine in nearby Virginia, Minn., which it acquired when it purchased another steel company, ArcelorMittal USA, in 2020.

"I feel like it's a blow to my gut,” said Babbitt Mayor Andrea Zupancich. “Belts are going to be tightening up all over the Range.”

Zupancich said this news affects more than just Babbitt and Silver Bay and the laid off workers. Everyone “knows someone who works at the mine or is affected by it,” she said.

The temporary closure was originally expected to last until at least September. Now Zupancich said there’s just a lot of uncertainty.

"You've got rising food costs, fuel costs, heating costs, property taxes all just went up. I mean, this is hard.”