Magnetation layoffs and taconite plant closure begins Jan. 18

Bankruptcy-burdened Magnetation LLC will suspend operations at its Bovey iron ore plant beginning Jan. 18, affecting 163 workers.

The news, learned Wednesday night, comes two months after Magnetation warned it could soon idle a second iron ore plant due to the severe downturn in the global iron ore industry, where prices per ton are 60 to 70 percent below normal.

Magnetation idled its Keewatin plant last April and then filed for bankruptcy protection in May.

The new plant closure is the latest hit to Minnesota's Iron Range. Other taconite plants that idled operations last year include North Shore Mining in Silver Bay, United Taconite in Forbes and Eveleth, Mesabi Nugget in Hoyt Lakes, Mining Resources in Chisholm, Minntac in Mountain Iron and Keetac in Keewatin.

In all, more than 2,000 workers faced layoffs.

Now Magnetation is deepening the list, but it can't be helped, company officials said.

"In these difficult market conditions, we must balance our current production with our customers' needs to sustain our business. As a result, we have to make the necessary production adjustments and associated staffing reductions," Magnetation CEO Larry Lehtinen said. "At this time, there is no way to predict how long this curtailment may last."

Magnetation alerted the state about the possibility of a Bovey plant closure in November, which prompted state officials from the Minnesota Dislocated Workers program to begin planning for ways to assist affected workers.

This week, Gov. Mark Dayton again renewed his call for a special legislative session that would include possible action to provide jobless benefits to the laid-off Iron Range workers. No agreement on the session has been reached.

Dayton and others point to a swell of cheap steel imports from other countries, especially China. Taconite, which is mined iron ore converted into concentrated pellets, is a key ingredient to steel, so what affects the steel sector also affects iron ore activity around the globe.

Last year, global iron ore prices sank to historically low prices, hurting the profits of companies such as Magnetation, Cliffs Natural Resources, U.S. Steel and Steel Dynamics.

U.S. Sens. Amy Klobuchar and Al Franken, both D-Minn., have been lobbying for new trade protections that will swiftly penalize countries for illegal steel dumping.

They have also worked with Dayton to secure federal unemployment benefit extensions for Mesabi Nugget workers laid off last spring. Those benefit extensions were approved in August for about 200 workers.

Dee DePass • 612-673-7725