Published: April 25, 2022 |

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Cleveland-Cliffs is maintaining plans to temporarily shut down its Northshore Mining operations in Babbitt and Silver Bay on May 1.

Cliffs, Minnesota’s largest iron ore operator, said in February it would idle the facilities this spring amid a royalty dispute and changing operational strategies. Together, the operations employ 500 people.

During an earnings conference call Friday, Cliffs CEO Lourenco Goncalves said the company has “space capacity.”

“We are treating Northshore in Minnesota as our swing producer. We are not planning to run Northshore at this time because we feel that that would not be the right thing to do,” said Goncalves.

Northshore’s mine in Babbitt and the taconite processing plant in Silver Bay are expected to be closed for at least four months. The shutdown will be a significant economic blow to both Silver Bay and the Iron Range.

Cleveland-based Cliffs is in a long-running dispute with Mesabi Trust, a publicly traded company that gets all of its revenue from royalties paid by Cliffs for ore mined in Babbitt. Goncalves has called the royalty payments “absurdly high.”

In 2019, Cliffs spent $100 million upgrading Northshore’s operations to produce a better grade of iron for steelmaking. But that supply is now being sourced from the Minorca mine near Virginia, Minn., which Cliffs has owned since buying ArcelorMittal USA in late 2020.

Through acquisitions over the past couple of years, Cliffs — which also owns two other Iron Range taconite operations — has transformed itself into a full-fledged integrated steelmaker.

The company is shifting away from selling iron ore to other steel companies. It also acquired a scrap-steel firm last fall, which can supply its steelmaking operations in place of some iron ore.

Ukraine and Russia are major iron and steel producers, and the war has constricted global supplies of both.

Source: Star Tribune

About Cleveland-Cliffs
Cleveland-Cliffs is the largest flat-rolled steel producer in North America. Founded in 1847 as a mine operator, Cliffs also is the largest manufacturer of iron ore pellets in North America. The company is vertically integrated from mined raw materials, direct reduced iron, and ferrous scrap to primary steelmaking and downstream finishing, stamping, tooling, and tubing. They are the largest supplier of steel to the automotive industry in North America and serve a diverse range of other markets due to their comprehensive offering of flat-rolled steel products. Headquartered in Cleveland, Ohio, Cleveland-Cliffs employs approximately 26,000 people across its operations in the United States and Canada.

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