MINNEAPOLIS (AP) — Five taconite mines on Minnesota’s Iron Range and two in Michigan could shut down at midnight Friday if the plants’ owners and the United Steelworkers union don’t agree on new contracts.
The mines and their processing plants — owned by Cliffs Natural Resources Inc., ArcelorMittal USA and U.S. Steel Corp. — turn low-grade iron ore into high-grade pellets that are used to make steel.
The negotiations in Pittsburgh are part of a larger set of nationwide talks between steel companies and the union over contracts that all expire at midnight Friday. Industry observers say a nationwide shutdown at ArcelorMittal, in particular, could seriously impact the economy.
“They’re still negotiating. That’s always a good sign,” Wayne Ranick, a national spokesman for the Steelworkers in Pittsburgh, said Thursday.
So far, both sides are saying little, declining even to name the major unresolved issues in the Cliffs and U.S. Steel talks. But the union says ArcelorMittal — a unit of Luxembourg-based ArcelorMittal S.A., the world’s largest steel company — wants deep concessions.
“They’re keeping it close to their chests in Pittsburgh now,” said Steve Lere, financial secretary for Steelworkers Local 6860, which represents workers at Cliffs-owned United Taconite in Eveleth.
More than 4,000 mine employees in Minnesota and Michigan are among around 29,000 Steelworkers nationwide who are covered by the talks.
Other affected mining operations include Cliffs-managed Hibbing Taconite in Minnesota; the Cliffs-managed Empire and Tilden mines in Palmer, Mich.; U.S. Steel’s Minntac mine in Mountain Iron, Minn., and Keetac mine in Keewatin, Minn.; and ArcelorMittal’s Minorca Mine in Virginia, Minn. The Cliffs operations supply U.S. Steel and ArcelorMittal.
“Cliffs has had record profits for the last four years. We’re just trying to keep what we had and maybe get a little bit more out of the deal,” Lere said.
Spokeswomen for Cliffs and U.S. Steel said their companies aren’t commenting on specifics of the negotiations. Cliffs has said it’s ready to use replacement workers if needed.
Both sides, however, indicate negotiations have been contentious between the union and ArcelorMittal.
“As we get closer to the contract deadline of September 1, ArcelorMittal is in continuous dialogue with the United Steelworkers and remains optimistic about reaching a fair and equitable contract with the USW without a work stoppage,” the company said in a statement Thursday. “As a precautionary measure … ArcelorMittal has recently begun the process of taking asset preservation steps at its facilities should a work stoppage occur,” the statement continued.
The Steelworkers offered a grim take on the ArcelorMittal talks in a statement Wednesday.
“Unfortunately, the company has maintained its insistence on the kind of concessions that we have been reporting to you, including two-tier wages and benefits, attacks on our contractual rights, and cutting back our health care,” the statement read.
U.S. Steel has sounded optimistic from the beginning, but the impact of an ArcelorMittal shutdown would be devastating, said David Phelps, president of the American Institute for International Steel. He said he hasn’t seen anything that makes him think those talks are close to being resolved.
“Everybody’s holding their breath right now,” Phelps said.
ArcelorMittal is North America’s largest steel producer, Phelps said, and steel supplies could run out quickly unless the company has made plans to bring some in from overseas.
“Customers are going to very quickly run out of material and there’s going to be a big price spike,” he said.
Effects would be felt throughout the transportation and logistics chain, Phelps said. For example, he said, Great Lakes ore carriers would be affected because there’s no need to ship pellets to an idle steel mill.
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