Cliffs will reopen its United Taconite Mine two months ahead of schedule
Cliffs Natural Resources Inc. announced plans to restart its United Taconite mining operation in Minnesota during August, two months earlier than recently expected.
The Wall Street Journal reported that the company is contracted to supply the majority of U.S. Steel Canada’s iron-ore pellet requirement for the third and fourth quarters. Cliffs Natural Resources, the largest iron ore miner in the United States also raised its sales volume and production guidance for 2016.
On May 31, Cliffs Natural Resources reached a 10-year agreement to supply steel giant ArcelorMittal with iron-ore pellets.
Cliffs had temporarily idled the United Taconite and Northshore Mining operations in Minnesota in 2015, citing high levels of steel imports that had hurt its customers’ production rates, which in turn hurt demand for its iron-ore pellets.
Cliffs said that after it reached its deal with ArcelorMital that it planned to reopen the United Taconite site in October. The company previously had announced plans to reopen Northshore Mining in May.
For 2016, Cliffs expects sales volume of 18 million tons, compared with its previous guidance for 17.5 million tons. Its production forecast was increased by 500,000 tons to a total of 16.5 million tons.
The United Taconite operation, which includes an iron-ore mine and a pellet-processing plant, employs roughly 450 workers. The Northshore operations employ about 540 workers.
The mines were among the many industrial facilities in the U.S. to fall prey last year to a painful downtown in the industrial commodities sector, driven by a slowdown in Chinese demand, a collapse of energy prices and the stronger dollar.
Under Chief Executive Lourenco Gonclaves, Cliffs has sold or shut down operations in Canada and the U.S. to focus on mining in Michigan and Minnesota, where the company has a geographical advantage selling to the Midwestern steel mills that supply the U.S. car industry.
During April, Cliffs reported that it swung to an unexpected first-quarter profit because of refinancing related to the iron-ore miner’s efforts to improve its balance sheet. Revenue slumped 32 percent, but the decline was less than analysts had feared.