A major player on the Iron Range is filing for bankruptcy, a move that may signal a dire situation in Minnesota's mining industry.
According to a Tuesday news release from Grand Rapids-based Magnetation LLC, the company and its subsidiaries have petitioned for Chapter 11 bankruptcy protection, under which they plan to restructure the business.
The iron ore concentrate and pellet producer says it's reached an agreement with creditors that will allow it to continue long-term operations. The release also indicates the company will keep paying employee wages and benefits, such as health care, "without interruption."
“The significant decrease in global iron ore prices along with our existing capital structure has created a challenging business environment in the short term," CEO Larry Lehtinen said, adding that "the reorganization process will create a more competitive and successful company."
This comes just a few months after the company indefinitely idled its iron ore plant in Keewatin, Minn., and laid off 49 workers.
Magnetation also has operations in Bovey and Coleraine, as well as in Indiana, the Star Tribune reports.
It's a situation that seems to be causing jitters at the State Capitol.
"Every legislator dreads hearing an announcement that a large employer in their region is in trouble," said DFL Senate Majority Leader Tom Bakk, according to MPR News. "The reality is our iron ore industry is no longer competitive in a global market."
Magnetation isn't the only mining company impacted by the sagging global market – industry giant U.S. Steel has idled two Minnesota plants over the past couple of months, putting 1,100 people out of work.
Cliffs Natural Resources is also laying off about 100 salaried positions at three of its Iron Range facilities, according to steelworkers union leaders. The company has not commented.