Cliffs Natural Resources announced Monday that it will temporarily idle its Wabush Pointe Noire pellet plant in Sept-Iles, Quebec, by June because of high production costs and lower prices for iron ore sold on the global market.
The shutdown will lay off about 165 workers at the facility.
The company, which also has about 85 employees on layoff from its North Shore mining operations in Minnesota, told the News Tribune the Quebec plant shutdown will have no effect on its Minnesota operations, including North Shore, United Taconite and Hibbing Taconite.
"Idle means temporary," said Sandy Karnowski, Cliffs spokeswoman in Minnesota. "Just like North Shore's furnaces, we hope to restart them (the Quebec facility) sometime in the future when market conditions improve."
The company said it is shifting focus to its Bloom Lake operations in Canada. Costs per ton for production at the Quebec facility are significantly higher than at other Canadian or Minnesota facilities, the company has said.
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"The current cost structure at Wabush is not sustainable and we are taking a disciplined approach to reducing our higher cost operations," said Laurie Brlas, executive vice president and president of global operations, in the statement announcing the shutdown.
The Wabush mine and concentrator are located near the town of Wabush, Labrador, and the pellet plant and dock facility are located in Pointe Noire, Quebec.
The entire Pointe Noire complex comprises a pellet plant, railroad and port. The company said it will continue to operate the rail and port operations and proceed with a multi-year investment in the port's expansion that includes a ship loader for large ocean vessels. The shipping facility serves both the Wabush and Bloom Lake operations.
"Due to the dynamics in the marketplace, we are taking measures to adjust our iron ore pellet production at our Wabush operation while continuing to meet our customer commitments," said Joseph A. Carrabba, Cliffs' chairman, president and chief executive officer, in a statement. "We understand this is a hardship for our employees and their families. During this transition, we will be working with them including exploring other opportunities at Cliffs."
