Minorca Mine production not impacted by Indiana blast furnace idle

A shovel picks up several tons of rock as an empty truck moves in to take the load at ArcelorMittal Minorca in June 2016.

VIRGINIA — ArcelorMittal’s plan to idle an Indiana blast furnace is not expected to impact production at the company’s Minorca Mine in Virginia, providing a slight sigh of relief to the Iron Range in the wake of job cuts last week at two competing mining operations.

The company announced Monday that it will temporarily idle Blast Furnace No. 3 at its Indiana Harbor location in East Chicago, Indiana, marking the second Great Lakes-based blast furnace to idle this year, following U.S. Steel’s decision to shut down its Gary Works plant in Indiana.

Minorca Mine in Virginia supplies flux pellets to Indiana Harbor, and though the product can work in any blast furnace on site, the mine mainly feeds Blast Furnace No. 7, accounting for 50 percent of its pelletized iron requirements.

“This will not impact ArcelorMittal USA’s ability to meet current customer demand," the company said in a statement.

Officials at ArcelorMittal explained it will idle Blast Furnace No. 3 and its 4,500 tons a day of production rather than undergoing a major expense of relining it, a total rebuild required every few decades to keep it operational for the long term.

The idling leaves Indiana Harbor with two remaining blast furnaces — No. 7 and Blast Furnace No. 4 — on the 3,100 acre lot that used to operate four furnaces. No. 3 has had issues in recent years, going down for weeks last year after a bell dropped into the furnace, and it was shut down for months in 2015 for planned maintenance.

"Blast Furnace No. 3 at ArcelorMittal Indiana Harbor has reached the end of its current campaign and requires significant capital investment for continued operation," the company said in a statement. "The furnace will be taken down in a safe and orderly fashion and preserved to maintain our capacity for when customer demand merits the necessary capital investments for a new campaign."

While news of the idle spares production at Minorca Mine for the foreseeable future, it provides further evidence of a slumping steel market, emphasized on the Iron Range last week when more than 30 employees lost their jobs at U.S. Steel’s Minntac and Keetac taconite plants.

Minorca notably withstood the 2015 industry downturn without layoffs or idling, along with Hibbing Taconite, while the other four Iron Range taconite plants either went down or curtailed.

Still, industry watchers maintain that the idling and job cuts aren’t signs of an impending and prolonged regional swoon.

Kelsey Johnson, president of the Iron Mining Association of Minnesota, said in a phone interview Tuesday that global factors continue to impact the domestic steelmakers.

China, she said, has not slowed steel production as expected and global supply is driving prices down, that combined with higher environmental and energy costs for U.S. producers, is reducing the global competitiveness for domestic players.

“I think they’ll maintain their foothold, but it’s hard to predict the future,” she said of U.S. producers. “I’m not too concerned long term. It looks like a minor fluctuation in the market, but we have to do a better job of reining global production of steel.”

But lifting tariffs isn’t part of the answer, Johnson said, noting blast furnace capacity has risen to above 80 percent from a pre-tariff level in the 70 percent range. That capacity had dropped off from a high near 85 percent, but utilization is at feasible point for the industry.

“If the capacity utilization is above 80 percent, the steel industry is financially viable,” she added. “That’s largely because of tariffs that we’re that high.”


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