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Minntac will ramp up production, recall some employees sooner than expected

Idled lines at U.S. Steel's Mountain Iron processing plant will restart in late July and the mining operations will restart in late August.

Minntac.jpg
Part of U.S. Steel's Minntac facility in Mountain Iron seen in 2015. (File / Forum News Service)

U.S. Steel's Minntac iron ore mine and pellet processing plant in Mountain Iron will ramp up production sooner than expected after the COVID-19-induced slump in steel demand curbed pellet production at the facility in May and the company laid off hundreds.

According to a letter sent Tuesday to members of United Steelworkers Local 1938, company officials told the union that production lines 6 and 7 will start making pellets again the week of July 26 with maintenance employees being recalled from layoffs starting the week of July 5.

U.S. Steel spokesperson Amanda Malkowski confirmed the late July restart of Minntac's "Step III Plant."

"This is roughly one month earlier than the planned restart," Malkowski said in an email to the News Tribune. "We pulled up the timeline to adjust our pellet inventory to meet demand."

"At this time they did not give us a tentative recall for operating personnel," Local 1938 President Steve Bonach and Vice President and Grievance Chair Chad Daniels wrote.

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In late August, the mine will return to "full operation," the union said, but it was unclear when mine employees would be recalled.

Asked if all 260 laid-off employees would be recalled, Malkowski said: "Some employees will be recalled as part of this decision."

Unlike three of the Iron Range's other six mines and plants, Minntac has remained open during the pandemic but lowered its production and laid off 260 workers last month .

Minntac, in Mountain Iron, is considered the country's largest facility of its type with 1,460 total employees in 2019 and the ability to produce 16 million net tons of pellets per year.

U.S. Steel also "indefinitely" idled its Keetac mine and pellet plant in Keewatin and laid off 375 employees there.

"We have no update on when Keetac may restart," Malkowski said.

Last week, the Pittsburgh-based company said it expected to lose $315 million in the second quarter of 2020.

"As expected, the second quarter is being significantly impacted by the effects of COVID-19 and the expected nonrecurring costs associated with a significant portion of our steelmaking operations being idled in the quarter," U. S. Steel President and CEO David Burritt said in a news release .

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Hibbing Taconite โ€” a joint venture between ArcelorMittal (which manages it and owns the largest stake in Hibtac), U.S. Steel and Cleveland-Cliffs โ€” said last week it was pushing back its restart date to August , a month after its expected restart. Hibtac's 650 laid-off workers will begin returning to work at the end of July.

Cliffs' Northshore Mining in Babbitt and Silver Bay is still slated for an August restart, company officials said earlier this month, even as its Tilden Mine in Michigan restarts earlier than expected.

In total, layoffs at the three idled facilities and Minntac totaled approximately 1,760 workers, more than one-third of the 4,105 total jobs at the Iron Range's six mines in 2019.

Cliffs' United Taconite in Eveleth and Forbes, ArcelorMittal's Minorca Mine in Virginia and Minntac have remained open during the pandemic.

The American Iron and Steel Institute on Monday said the capacity utilization of the country's blast furnaces sat at 54.6% last week. Prior to the pandemic, utilization was consistently above 80%.

Earlier this month, the Worldsteel Association forecast global steel demand will fall by 6.4% in 2020 due to the COVID-19 pandemic.

"Our customers have been hit by a general freeze in consumption, by shutdowns and by disrupted supply chains. We therefore expect steel demand to decline significantly in most countries, especially during the second quarter," Al Remeithi, chairman of the Worldsteel Economics Committee, said in a news release. "With the easing of restrictions that started in May, we expect the situation to gradually improve, but the recovery path will be slow. "

Jimmy Lovrien covers energy, mining and the 8th Congressional District for the Duluth News Tribune. He can be reached at jlovrien@duluthnews.com or 218-723-5332.
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