‘They stack it up...and then you’re shut down’

A 240-ton truck is quickly loaded at Minntac, which has reduced production and staff amid the COVID-19 pandemic.

For 14 months, Ben Kempa reported to a good-paying job at Minntac Mine as an electrician.

Kempa will now instead be reporting to the unemployment line.

“It's not totally unexpected,” said Kempa, of Chisholm. “Even prior to this virus we were in a manufacturing recession. We work 80% of the time under the constant threat of recession or layoff.”

Caught in the nationwide economic collapse, United States Steel Corp., is laying off 252 steelworkers and reducing production at Minntac Mine in Mountain Iron.

“It's a double whammy for our people,” said Steve Bonach, United Steelworkers Local 1938 president. “It was tough enough to come in and deal with COVID-19 and now we have this.”

It's the third downturn in the northeastern Minnesota iron ore industry since 2009.

And steelworkers are again trying to hang onto as many jobs as possible.

Six days since the layoffs and the production cutback were announced, USW officials and U.S. Steel on Wednesday signed off on a layoff minimization plan.

However, as of Friday, Local 1938 and some steelworkers still hadn't been notified by the “I'm not happy with the company that they haven't informed the employees,” said Bonach. “I'm getting call after call from employees asking whether they're working or laid off.”

Under the minimization agreement, some senior workers will take voluntary layoffs, said Bonach.

However, of the 252 being laid off, 100 have less than two years employment, he said.

Like Kempa.

“It's just a function of what we do up here,” said Kempa. “It's like a light switch. They stack it up (iron ore pellets) on the ground up here and then you're shut down.”

In recent years — as the industry's original taconite miners retire – there's been a huge influx of young employees into the workforce.

Minntac has 270 new hires since 2015 and 750 since a downturn in 2009, said Bonach. Minntac employs about 1,300 hourly paid steelworkers.

All 100 miners with under two years service will lose their health insurance effective June 1.

Local 1938, which has plenty of space in its union hall in Virginia for social distancing, will help workers search for new health care coverage, said Bonach.

“We'll be working with them,” said Bonach. “We're going to get some extra computers in here and have our benefits coordinator here. We're telling everybody that has poor computer service that we can help them here.”

The downturn is a reminder of the need to support local businesses and become more self sufficient as a nation, said Rep. Dave Lislegard of Aurora.

“My heart goes out to the workers,” said Lislegard, a former steelworker at LTV Steel Mining Co. “The sad thing is these young people have families and they have mortgages. When you're young, you have all these expenses and burdens and they've got a lot of anxiety. The only thing we can do is support our workers, our small businesses and the industry as a whole to get through this time.”

Some jobs that were being performed by outside contractors such as custodial services and maintenance repair, will instead be done by steelworkers under the layoff minimization plan, said Bonach.

And some steelworkers will be moved from their regular jobs to other positions, he said.

“We will be shifting around a little bit.” said Bonach. “Some people who work in the crusher or concentrator will be going to the agglomerator.”

Minntac is North America's largest iron ore plant.

But even that isn't enough to keep it exempt from the economic malaise.

It's the fourth northeastern iron ore mine in weeks to be impacted by the sinking economy.

Northshore Mining Co., Keetac and Hibbing Taconite Co., are idled.

Together, about 1,500 hourly workers at the four plants, along with an unknown number of salaried employees, are out of work.

At Minntac, Lines 6 and 7, the plant's newest pellet-making lines, will be idle, according to Bonach. Line 7 is currently under repair. Lines 3, 4 and 5, remain operational.

“There will be 136 laid off in the plant for eight weeks,” said Bonach. “In the mine, 116 will be laid off for eleven weeks.”

A positive sign is that U.S. Steel is continuing to have steelworkers remove overburden in the mine in preparation for mining additional crude ore, said Bonach.

“I was told they are going to continue stripping in the mine, which is a big plus for us,” said Bonach. “This is good that they're going to continue doing that.”

Downturns in the domestic vehicle manufacturing, energy and construction sectors have dramatically lessened the need for steel. Domestic steel mills are operating at a meager 51.1% capacity.

U.S. Steel has idled eight of its 11 domestic blast furnaces, according to the company's first quarter earnings report. Across North America, 65% of U.S. Steel's raw steelmaking capacity is shuttered.

Iron ore pellets produced at northeastern Minnesota mines are the main ingredient used to make steel.

In March, more than 507,000 tons of iron ore pellets were shipped from the Duluth-Superior Port, according to Jayson Hron, Duluth Seaway Port Authority director of communications and marketing. That's up by almost 200,000 tons compared to March 2019. Part of the increase was due to less ice cover on the Great Lakes this spring, said Hron.

Plans are for Minntac processing plants to resume operations July 6 and mine operations three weeks later.

For steelworkers like Kempa, it's a repeat of history.

“My work partner has been out there for seven years,” said Kempa. “He says there's probably been 12 months over that time where there hasn't been a shutdown or a layoff.”

Kempa, who grew up in Cherry, formerly worked at Mesabi Nugget, an iron nugget facility in Aurora/Hoyt Lakes, until that facility closed. He then went to work for Mesabi Nugget's parent company, Steel Dynamics, Inc. in Butler, Ind.

Back on the Iron Range, Kempa and 251 others are now off work again.

“The initial word was we'd be out of work eight weeks in the plant and eleven weeks in the mine,” said Kempa. “But that's subject to change at any whim. It's tough to believe what they say because there's a different rumor every day.”

With Minntac's production cutback and plant idlings, it's likely that northeastern Minnesota's iron mining industry will fall below 30 million tons of total pellet production for the year. That would mean mining companies would not be eligible for a 25.1 cent-per-ton rebate on each ton of pellets produced.

Meantime, Bonach has spent more than a week answering phone calls and questions from concerned members.

“It's all 252 brothers and sisters who are getting laid off who are my worry right now,” said Bonach. “I want to see these people start getting back to work.”


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