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Minnesota Duluth Complex and Iron Range

Cliffs Natural Resources investors face more bad news: A class action lawsuit – by John Funk (Cleveland Plain Dealer – March 16, 2016)

http://www.cleveland.com/

CLEVELAND, Ohio — Investors who still own stock in Cleveland-based Cliffs Natural Resources face another round of bad news.

Their stock lost more than 12 percent of value Tuesday, closing at just $2.38 a share on the New York Stock Exchange, after two investors who previously bought unsecured bonds in the company filed a class action lawsuit.

The complaint, filed in a federal court in New York, alleges that Cliffs, still the nation’s larges iron ore mining company, gave big institutional bondholders and banks an opportunity to exchange their unsecured Cliffs notes for new unconditionally guaranteed notes that pay an 8 percent rate of interest and come due in 2020.

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Cliffs Natural Resources to Restart Minnesota Mine – by John W. Miller (Wall Street Journal – March 14, 2016)

http://www.wsj.com/

The U.S.’s biggest iron ore miner Monday said it would restart a key mine in Minnesota, a positive sign for the battered U.S. steel industry following a small uptick in prices and new import tariffs on foreign steel.

Cleveland-based Cliffs Natural Resources Inc. said it would resume production of iron ore pellets at its Northshore operations, which employ 540 workers, by May 15.

The mine, which was idled in December, was one of 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. Steel prices in the U.S. fell over 30% on the year. Big steelmakers laid off thousands of workers, closed plants and posted billions of dollars in losses.

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A plan for Minnesota’s first copper-nickel mine has passed a major milestone – by Steve Karnowski (Vancouver Province – March 3, 2016)

http://www.theprovince.com/

ASSOCIATED PRESS-MINNEAPOLIS – A plan for Minnesota’s first copper-nickel mine passed a major milestone Thursday with the Department of Natural Resources approving the project’s final environmental review, meaning the company can now start pursuing the long list of permits it needs to move forward.

DNR Commissioner Tom Landwehr said he determined that the 3,500-page environmental impact statement for the proposed PolyMet mine in northeastern Minnesota meets all the legal requirements. If the project is built as described, he said, “we will meet standards … intended to protect public health and the environment.”

The approval lets PolyMet Mining Corp. begin applying for the more than 20 permits it needs to build the mine near Babbitt and processing operations six miles away near Hoyt Lakes, at the site of the former LTV Steel taconite plant that has been closed since 2001.

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[Michigan] Mining’s last stand? Upper Peninsula way of life is threatened – by Ted Roelofs (Crains Detroit Business – February 19, 2016)

http://www.crainsdetroit.com/

MARQUETTE COUNTY — At Sherri’s Restaurant in Ishpeming, above the faint clatter of dishes from the kitchen, the conversation of the day in winter skips around from town gossip to snowmobiling to the latest storm to close the local schools. As one might expect in a no-frills Upper Peninsula diner, the food is all-American, the portions ample.

Said owner Sherri Steele of the “farmers’ omelette” on the breakfast menu, a calorie-rich platter of three eggs, green pepper, onion, cheese, potatoes and toast on the side: “It’s huge.”

But as she prepared for the Friday night smelt fish fry she’ll dish up that evening, Steele touched on another topic that looms over this community: What if the mines close?

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Cliffs hanging on, but waiting to reopen plants – by John Myers (Duluth News Tribune – Jan 27, 2016)

http://www.duluthnewstribune.com/

Cliffs Natural Resources had a terrible 2015, losing money and slashing production, but the company expects demand for its taconite iron ore to tick up in 2016 and vows to reopen idled operations once sales increase.

Company officials Wednesday said both United Taconite in Eveleth and Forbes and Northshore Mining in Babbitt and Silver Bay will remain closed at least through March but will reopen “sometime this year” as demand from steelmakers for taconite increases.

Hundreds of laid-off workers at each plant are waiting to go back on the job.

“It’s too soon to give you a date, but it will be this year,” Cliffs CEO Lourenco Goncalves told the News Tribune in a telephone interview Wednesday.

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National view: Slow permitting devastating US mining, manufacturing – by Kevin Kearns (Duluth News Tribune – February 7, 2016)

http://www.duluthnewstribune.com/

Kevin Kearns is president of the Washington, D.C.-based U.S. Business and Industry Council, a national business organization that advocates for U.S. manufacturers.

Imagine if significant gold deposits were found in northern Minnesota. That would be a boon for Minnesota mining, since gold is in great demand for use in such diverse products as smartphones and solar panels.

But what if it took 10 years for a mining firm to get the approvals needed to start extracting this gold? Imagine the disappointment in terms of lost job opportunities and lost tax revenue.

It’s not a far-fetched possibility, however, to expect a lengthy process before Minnesota could possibly enjoy any newfound gold wealth.

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Signs point to uncertain future for PolyMet’s plans – by Marshall Helmberger (Timberjay.com – February 3, 2016)

http://www.timberjay.com/

The announcement late last Wednesday that Glencore had agreed to loan PolyMet another $11 million to pay for an update to its definitive feasibility study, was greeted by some as a piece of good news— that suggests the giant Swiss-based commodities broker still sees potential in the company’s NorthMet copper-nickel mine despite the recent collapse in metals prices.

Yet the terms of the loan, and the likely results of the feasibility update, point to a project that’s teetering on life support. While PolyMet saw a bump in its stock price in November with the release of the Final Environmental Impact Statement, investors have grown increasingly pessimistic ever since. As of this week, the company’s stock price had recovered slightly, to 89 cents, but is still down 20-percent since its post-FEIS peak.

Savvy investors can’t be unaware that major copper mines around the world are being shuttered by companies like Glencore, Rio Tinto, and others, in a desperate attempt to stem the financial bleeding and the production oversupply that has cut copper prices in half from their peaks in the late 2000s.

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[Iron Range] Our view: We will survive this mining downturn, too (Duluth News Tribune – February 3, 2016)

http://www.duluthnewstribune.com/

We’ve lived through this before. Survived it. And the challenges to Northeastern Minnesota now are similar to the challenges in 2001, the last time “we wondered if we were going to have an iron ore industry in the state of Minnesota,” as Frank Ongaro said at a chamber forum Tuesday in Duluth.

Then he was president of the Iron Mining Association. Now he’s executive director of Mining Minnesota, which advocates for the environmentally responsible mining of copper, nickel and other precious metals. He knows more than a thing or two about the industry, its incredible highs and its devastating lows.

“We’ve been interdependent — Duluth, Northeastern Minnesota and the Iron Range — for 100 years. (The mining industry) has had its ups and downs. It’ll continue to have its ups and downs. … (Right now) we’re at a bottom,” Ongaro said. “But be assured, we have had these cycles, and we will come out of this cycle at some point, at some level.”

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Minnesota cuts royalty rates for mines – by John Myers (Duluth News Tribune – December 2, 2015)

http://www.duluthnewstribune.com/

The Minnesota Executive Council voted 4-1 Wednesday to cut the mineral royalty rates mining companies pay to take iron ore off land where the state holds the mineral rights.

The council voted to cut rates by 19 percent, retroactively to April, and to keep the rates down through next June.

This round of cuts are aimed at ArcelorMittal’s Minorca mine in Virginia and well as Hibbing Taconite and NorthShore Mining. Cliffs Natural Resources owns NorthShore and is co-owner and manager of Hibbing Taconite.

The state would lose nearly $900,000 in royalties due to the cuts assuming production levels continue.

The royalties go into education and other state funds.

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Our view: Push away petty politics, help Iron Range miners – Editorial (Duluth News Tribune – December 2, 2015)

http://www.duluthnewstribune.com/

Turkey Day has come and gone, and most of us are focusing now on having a merry Christmas.

But not so much across the Iron Range where the upcoming holidays are being anticipated with a little less cheer this year after more than 1,400 iron mining employees were laid off in recent weeks and where, worse, unemployment benefits for some 600 of them are about to expire. That’s 600 families for whom the future is bleak and for whom the holidays — well, who can think of the holidays?

Making matters more gut-wrenchingly maddening is the knowledge that Minnesota Gov. Mark Dayton and the Minnesota Legislature have the ability to help but haven’t.

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Dayton issues warning to Essar about paying companies working on Nashwauk site – by John Myers (Duluth News Tribune – November 30, 2015)

http://www.duluthnewstribune.com/

Gov. Mark Dayton on Monday pledged to play hardball with Essar Steel Minnesota, saying he’ll call the state’s $67 million loan to the company on Wednesday if Essar doesn’t pay past-due bills from local construction companies.

Essar has essentially been in default on the state money since October because it failed to live up to an agreement to create jobs at an iron and steelmaking facility in Nashwauk by that date.

The company has moved ahead with work building a taconite plant at the Nashwauk site, but has shelved plans to make iron and steel at the site.

That puts the company in violation of the 2007 agreement signed when the economic development money was awarded by the state.

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Mining spinoff jobs threatened in downturn – by John Myers (Duluth News Tribune – November 25, 2015)

http://www.duluthnewstribune.com/

Three years ago, Mitch Robertson showed a reporter around his booming steel fabrication business in Virginia, with sparks flying and machines clanking and business as brisk as it had ever been.

In late 2012, the price of iron ore was over $130 per ton. U.S. steelmakers were pumping out finished product for new oil pipelines, trucks and refrigerators. And Minnesota’s iron mining industry was shiping iron ore as fast as the stuff could be processed.

TriTec, Robertson’s company, was booming as it helped keep the mining industry moving with repairs on heavy equipment and specially designed equipment for taconite plants — such as rock-proof fuel tanks for mining trucks.

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Biggest U.S. Iron Ore Producer Says Rio, BHP in ‘Imaginary World’ – by Jasmine Ng (Bloomberg News – November 4, 2015)

http://www.bloomberg.com/

The biggest iron ore producer in the U.S. says its larger rivals in Australia are hurting themselves as well as their competitors as they ramp-up production in an oversupplied market.

With iron ore slumping to less than $50 a metric ton, revenues at the biggest miners are shrinking faster than costs, according to the head of Cliffs Natural Resources Inc., who said the majors’ expectations that rivals will quit the market aren’t being fully realized.

“Prices below $50 are not comfortable to anyone, including the majors,” Chief Executive Officer Lourenco Goncalves said in a phone interview from the company’s headquarters in Cleveland, Ohio on Tuesday. “The cost-cutting is not even close to offset their loss in revenues. My entire point: the loss in revenue, totally avoidable. Self-imposed. Self-inflicted.”

BHP Billiton Ltd. spokeswoman Emily Perry said on Wednesday the company wouldn’t respond to Goncalves’s remarks, while Rio Tinto Group sent comments from Brendan Pearson, head of the Minerals Council of Australia, which represents miners.

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Commodity Collapse Undermines an Activist’s Victory at Cliffs – by John W. Miller and David Benoit (Wall Street Journal – November 4, 2015)

http://www.wsj.com/

Iron ore’s price slump has upended Casablanca’s efforts to boost miner’s returns

CLEVELAND—Activist investors are learning that even the best-laid plans can crumble under the weight of the commodity-price swoon.

Consider the case of Cliffs Natural Resources Inc., an iron-ore-mining company.

Last year, Casablanca Capital LP, a New York-based activist firm, amassed a 5.2% stake and carried out one of the biggest boardroom coups activism has seen. It put in place a handpicked CEO, Lourenco Goncalves, who aggressively cut costs, and shut down or sold Cliffs’s worst-performing mines.

Cleveland-based Cliffs announced its second-straight profitable quarter last week, saying that it made $6 million in the third quarter, after losing $6.9 billion, mostly because of a write-down, a year ago.

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Can canoeing and mining coexist? Yes: Northland needs both mining and pristine nature – by Karl Everett (Duluth News Tribune – November 1, 2015)

http://www.duluthnewstribune.com/

Karl Everett of Duluth is a professional engineer, a geologist and a paddler. He has worked as a senior environmental manager; has consulted for mining and industrial clients; and has worked on many mining, metal and nonmetal projects.

We need mining for jobs and the economy in Minnesota. Mining continues to be one of the largest contributors to Northeastern Minnesota’s economy and directly employs thousands of men and women in high-paying jobs with medical benefits and supports additional people employed by vendors.

Part of the direct impact to the economy includes taxes and royalties paid by the mining industry toward Minnesota’s education.

Environmental management is a worldwide issue. After seeing pictures from Beijing during the Olympics, I think we are better at environmental management than most countries.

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