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Sign of relief? Idled mine with 540 workers will be back online by May


One of the state's shut-down mining operations will reopen this spring.

Northshore Mining will be restarting iron ore pellet production by May 15, Cliffs Natural Resources said Monday.

The operation, which is located in Babbitt and Silver Bay, employs about 540 people, according to the company.

Cliffs idled the operation in December, planning at the time to reopen it after the first quarter of 2016. The reason: Slumping demand for iron ore pellets, caused by widespread issues in the steel industry. They had enough pellets saved up in inventory to get by for a few months without producing more, the company said.

Northshore Mining was the second site Cliffs idled, having shut down United Taconite operations in the summer of 2015.

The CEO of Cliffs, Lourenco Goncalves, said in January he expected Northshore and United operations to be back online this year. Production at a third plant in Hibbing has continued.

On Monday, Goncalves noted the amount of "unfairly traded steel" (more on that below) is lessening, and Cliffs' clients will be needing iron ore pellets at "normal" levels again soon.

Sen. Al Franken put out a statement afterward, calling Cliffs' decision "not only good news for the company, but also for the 540 workers and their families hit hard by the flood of illegal foreign steel that has resulted in lost jobs and devastated communities across the Iron Range."

Help for Iron Range workers stuck

The mining industry – including Cliffs – was hit hard in 2015, as companies coped with a slumping demand for steel. At least seven of Minnesota’s 11 major mining operations are idled or shut down, the Duluth News Tribune reported, and nearly 2,000 workers have been laid off.

That difficulty was reflected in Cliffs’ fourth quarter results – the company lost $58 million during that quarter alone.

The issues have caught the attention of state lawmakers, as well as Gov. Mark Dayton. Both Democrats and Republicans in the state legislature agreed that the laid off workers should have their unemployment benefits (which for many have run out) extended further, calling it a priority.

Yet nothing happened during the opening week of the session, with Democrats and Republicans in the House fighting over a proposed tax break unrelated to the unemployed mine workers. (The Senate passed its own version without the break.)

A House Ways and Means Committee approved the bill Monday and sent it to the full House.

The bill was amended to include different language regarding the tax break that would ensure the unemployment trust fund remains financially stable, Session Daily reports. The new language was added after talks between House and Senate leadership over the weekend, the publication notes.

Why are the mines having trouble?

The price of steel has fallen dramatically recently – and many people, Minnesota officials included, blame it at least partially on other countries.

Countries such as China and India have been accused of illegally over-producing – then selling for below market value – cheap, foreign-made steel, and it’s ended up in the U.S. That's meant there’s less of a demand for steel made by companies here in the states.

The New York Times explored the problem in-depth in this article.

In December, White House Chief of Staff (and Minnesota native) Denis McDonough visited the Iron Range, saying he and the president’s administration understand the urgency of the situation. But fixes aren’t clear-cut.

Earlier this month, the U.S. said it would start imposing high tariffs on countries in connection with the illegal steel dumping – a move Franken and fellow Sen. Amy Klobuchar have praised.

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