Magnetation Warns Of Layoffs At Bovey Plant
ST. PAUL, Minn. (AP) — More worrisome taconite production news came to Minnesota's Iron Range on Wednesday, with another company warning of mass layoffs in a region already ailing from the downturn of the domestic steel industry.
Magnetation LLC announced the possible curtailment of iron ore production next year a plant in Bovey, which would trigger layoffs of longer than six months. It advised of the shift in a federal notice that's required at least 60 days ahead of layoffs of more than 50 workers for extended durations.
Gov. Mark Dayton and state leaders already are considering a special session to provide extended unemployment benefits to steelworkers who will soon exhaust their maximum allotment.
"It just underscores how grim the situation is up in northeastern Minnesota," Dayton said Wednesday. "Something has got to be done immediately."
Senate Majority Leader Tom Bakk, a Cook Democrat, said in statement Wednesday that legislation to address persistent unemployment and poverty among black Minnesota residents should also be on the agenda. In a written statement, Dayton said Wednesday he's in agreement with Bakk.
Matt Lehtinen, president of Grand Rapids-based Magnetation, said up to 163 workers could be affected but some could angle for open positions at the company's other plants in the region. The notice says nothing would occur until after Jan. 31, but Lehtinen said the scope of the production shift would be known within the next month.
According to company figures, the three-year-old plant extracts and processes more than 1 million metric tons of iron ore per year, with some of it shipped as far as its plant in Indiana for steel production.
"While any operating curtailment is unfortunate, we must balance our current production with our customers' needs to sustain our business in these challenging markets," Magnetation chief executive officer Larry Lehtinen said, noting that it's unclear how long the production slowdown would last but the company is hopeful to resume operations sometime in 2016.
A day earlier, Cliffs Natural Resources said it would temporarily shut down a second plant, Northshore Mining, in a move that could sideline up to 540 workers starting next month.
While Minnesota's taconite industry is accustomed to ups and downs, this one is more troubling because other downturns have tracked with national economic recessions, according to Mark Phillips, commissioner of the Iron Range Resources and Rehabilitation economic development agency.
In this case, Phillips said a strong dollar has made U.S. steel hard to export, low oil prices have reduced producer demand for tubular steel goods and other countries are flooding the market with cheap steel.
"We haven't seen where all these things line up. It's a global issue," Phillips said. "It's not something we or the state can do to flip a switch in a different direction."
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