Grand Rapids-based Magnetation LLC announced Friday that - barring additional financing or a new investor in the business - it may shut down its remaining Minnesota iron ore operations by the end of September.
The shutdown, if it happens, would affect Magnetation's Plant 4 near Grand Rapids, along with its pellet plant in Reynolds, Ind.
"While this was a difficult decision, the company believes that, in light of current circumstances, preparing for a safe and orderly wind-down while we continue to seek an alternative to a shutdown is the best course of action to support what is in the best interests of our employees, creditors and other critical constituents," Larry Lehtinen, CEO of Magnetation, said in a news release. "As a result, we are communicating the proper notifications to our employees and the communities. We will be working closely with the appropriate governmental agencies to assist any affected employees who would be laid off if this shutdown is implemented."
Magnetation said any shutdown would occur on or after Sept. 30, and that "the company intends to continue operating in the normal course until such time."
Magnetation LLC was founded in 2006 and is a joint venture between Grand Rapids-based Magnetation Inc. and AK Iron Resources LLC, an affiliate of steelmaker AK Steel. Magnetation recovers valuable iron ore from waste dumps left behind by long-closed mining operations.
The company was hit hard when the price of iron ore plummeted through 2014 and 2015, and filed for Chapter 11 bankruptcy reorganization in May 2015.
Magnetation's Plant 1 in Keewatin and Plant 2 in Bovey are closed indefinitely. A third plant, in Chisholm, which was co-owned with the parent company of shuttered Mesabi Nugget, also is closed. Magnetation's Plant 4, just outside Grand Rapids with about 130 nonunion employees, has remained in operation, supplying iron ore concentrate for Magentation's Reynolds pellet plant that supplies iron ore pellets to AK Steel Corp. mills in Ohio.