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EVTAC threatens closure

ST. PAUL -- If EVTAC does not secure liability insurance and banking loans in the next several days, the Eveleth taconite operation may be forced to shut down on Jan. 29, a company official said Wednesday.

ST. PAUL -- If EVTAC does not secure liability insurance and banking loans in the next several days, the Eveleth taconite operation may be forced to shut down on Jan. 29, a company official said Wednesday.
Chuck Williams, vice president of internal and external affairs for EVTAC, dropped the latest Range economic bomb shell at a Senate committee that was considering three LTV-related bills.
The timing of Williams' announcement did not sit well with some Range lawmakers.
Williams said if the deadline is not met, the company will run out of cash.
"We just won't have the money to meet the payroll," he said.
Some union leaders said Wednesday that they had heard the financing had been ironed out. But Williams said that wasn't the case.
"I talked to the president at 5 p.m. today (Wednesday)," Williams said after the hearing. "He tried to secure the insurance and loans but was unsuccessful."
Following two fires in two years, EVTAC has been placed in a high-risk category. The most recent fire occurred on Oct. 13, destroying the pellet conveyor system and halting production for three weeks. Without insurance, the banks will probably not renew the covenants, Williams said.
Before the October fire, EVTAC's liability insurance cost roughly $800,000. Now, the company expects to spend up to $4 million to $5 million a year on insurance.
And even if the company secures the insurance, the financial burden might still force the plant to shut down. The owners said EVTAC will operate on a month-to-month basis.
Right now, it costs EVTAC $35 per ton to produce taconite and the company only gets paid $31 for each ton, Williams said. The production costs must fall below $31 per ton for the plant to remain viable, he added.
EVTAC and other industry leaders will seek tax relief. Williams said legislators increased their taxes last year, while most other businesses enjoyed tax cuts.
Sen. David Tomassoni, DFL-Chisholm, said this just illustrates what's happening throughout the steel industry. He says the problems seen on the Range are directly related to the dumping of foreign steel into the U.S. market.
Williams also criticized the bill to extend jobless benefits that was approved by the Senate committee. He said if any layoffs are made at EVTAC, the company will have to pay supplemental benefits after the state benefits are exhausted, and the company will never recover that money.
Megan Boldt is the legislative correspondent in St. Paul for Murphy McGinnis Newspapers.

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