With car manufacturers up and running again, Cleveland-Cliffs is expected to restart Northshore Mining in Silver Bay and Babbitt next week.
The iron ore mining and steelmaking company announced it would idle the iron ore mine and pellet plant in April , laying off all but 100 of its 570 employees, as the pandemic caused the demand for steel to slump . Namely, the Big Three automakers — General Motors, Ford and Fiat Chrysler — shut down plants to curb the spread of COVID-19.
"Fast-forward to today, with our customers in the automotive sector back to more normal levels of activity, we have resumed production at all of our facilities that were temporarily idled, except the Northshore Mine, which will be back in operation next week," Cliffs CEO Lourenco Goncalves said in the call announcing second-quarter financial results.
The expected August restart of Northshore is on schedule with the company's April announcement. Cliffs announced in June it was restarting its Tilden Mine in Michigan and construction on its hot-briquetted iron plant in Toledo, Ohio.
On Thursday, Goncalves said the Toledo plant should begin producing HBI before the end of this year.
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Once complete, Northshore Mining will supply the HBI plant with 3.5 million tons of direct-reduced iron pellets every year. Northshore began producing that DR-grade pellet last summer in anticipation of the HBI plant's opening. HBI produced by Cliffs in Toledo will then be mixed with scrap metal in an electric arc furnace to make steel.
The pandemic caused three of the six mines on the Iron Range to idle production and a fourth to curb production, resulting in a total of 1,760 layoffs, more than one-third of the 4,000 total mine employees.
U.S. Steel's Minntac in Mountain Iron has brought back most of its 250 laid-off employees as it ramped up production this month. ArcelorMittal-managed Hibbing Taconite, which U.S. Steel and Cliffs own a share in, is also expected to restart in August.
U.S. Steel's Keetac in Keewatin has been "indefinitely" idled.
The nation's blast-furnace utilization rate has slowly ticked up, recently reaching 58.9% last week, according to the American Iron and Steel Institute . It had been above 80% before the pandemic but fell to 51.1 % in late April and early May.
Second-quarter results
Cliffs recorded a net loss of $108 million, or 31 cents per diluted share, in the second quarter of 2020. That compares to a profit of $161 million, or 57 cents per diluted share, in the second quarter of 2019. Through the end of June, the company has lost $157 million so far this year compared to a profit of $139 million during the same period in 2019.
“The second quarter was an unusual one, with the full impact of the COVID-19 pandemic hitting our clients," Goncalves said in a news release Thursday. "Our main concern then was preserving our liquidity during a time we were not able to ship steel to our clients in all markets we serve, and particularly in our main end-market: the automotive industry."
