For decades, the Iron Range has been the epicenter of American iron-ore mining. People here have been through plenty of boom-and-bust cycles and grown accustomed to being furloughed due to the ebbs and flows of steel prices and the auto industry. But they did not foresee the arrival of the COVID-19 and how the virus slowed or stopped operations due to its impact on the global economy.
In mid-April, Cleveland-Cliffs became the first mining company to have an operation fall, as the company announced the idling of Northshore Mining in Silver Bay and Babbitt until August. At least 470 of its 570 employees were laid off. It came on the heels of the company halting construction of its Toledo, Ohio-based hot-briquetted iron facility that Northshore was set to feed into.
The following day, U.S. Steel representatives said they would idle the Keetac mine and processing facility in Keewatin and lay off 375 of its 423 employees without a solid idea of when work would again become available, calling the shutdown indefinite.
Next up, Hibbing Taconite, run by ArcelorMittal, made public its closure. About 650 employees were laid off with the expectation of returning to work in July. "Due to the unprecedented and challenging times presented by the COVID-19 pandemic, the joint venture partners of Hibbing Taconite will be idling the operation," the company said at the time. "As a result, Hibbing Taconite has begun preparations to reduce production in a safe and orderly manner with necessary precaution to preserve the asset for future production."
In June, the company announced it would extend the idle period to August, saying through a spokesperson that it “will be taking all precautions and protocols necessary to ensure a safe and orderly restart.”
Earlier, in May, U.S. Steel-owned Minntac became the fourth of six mines on the Range to say it would lay off workers. Although the mine would still operate, at least 260 employees were laid off for more two months or longer with the hope of returning to work come August.
The move came less than 24 hours after the company announced that Canada-based Stelco planned to sell a 25 percent cut of Minntac, the largest taconite plant in the U.S, as part of a $600 million-plus deal. It also followed the U.S. Steel announcement of a $391 million loss in the first quarter of 2020 and plans to lay off more than 2,700 workers across the nation — a sign that times were rough not only on the Range.
The coronavirus essentially sent more than 1,750 workers home under Gov. Tim Walz’s stay-at-home order and his subsequent extensions that shuttered many businesses across the state bar the mines. Those remaining in full operation as of June include Cleveland-Cliffs’ United Taconite and ArcelorMittal’s Minorca Mine.
At the same time St. Louis and Itasca counties reported unemployment rates of 10.5 percent and 11.4 percent, respectively, according to data from the Minnesota Department of Employment and Economic Development in April.
State data shows that the Arrowhead region in the northeastern part of the state - which recorded an average of 4.5 percent unemployment in 2019 — reported 10.8 percent of the 159,949 labor force were unemployed.
Miners on the Range were among the bartenders, waitresses, hairdressers and numerous business owners in the region and state to apply for unemployment insurance. Between March 16 and June 14, at least 27,244 people in St. Louis County filed for unemployment, roughly 26.4 percent of the labor force.
Meanwhile, the governor has allowed the stay-at-home to expire, reopened outdoors activities and allowed all restaurants and bars with outdoor seating to reopen with about half its capacity since June. Hair salons are reopening again at restricted capacity and so are some cities and county governments across the state.
Today, miners are awaiting a return to work in an industry that has made a comeback in recent years, shipping out 37 million tons of taconite to steelmakers in 2019. But as many have been able to weather economic fallouts of the past, at least 1,600 mining jobs, or 25 percent, have vanished from the region over two decades.
But there’s potentially good news on the horizon.
While Cliffs reported a net loss of $49 million in the first quarter of 2020, the company’s chief executive said in a May investor’s report that there was a silver lining for the industry: the automakers.
The optimism from Lourenco Goncalves, chairman, president and CEO of Cliffs, came from automakers’ plans to restart production in the U.S. after shuttering plants due to the COVID-19 pandemic — and the company having “ample” liquidity needed to operate through as the coronavirus impacts the national economy.
Michigan Gov. Gretchen Whitmer cleared the way for the so-called Big Three — General Motors, Ford and Chrysler Fiat — to resume production. GM told employees this week that it will reopen assembly lines and reinstate thousands of jobs, according to ABC 12 in Detroit, who also reported that Ford plans to reopen nine plants across the U.S. and Mexico on May 18.
For iron ore mines and steel producers, talks of the automotive industry ramping up is welcome news as plants and blast furnaces across the Iron Range and the Midwest have idled with demand for steel cratering due to the pandemic.
As was a June announcement from Cliffs and Goncalves that they would restart the Tilden Mine in Michigan and return to constructing the Toledo HBI facility.
Construction on Cliffs’ HBI plant was shut down March 20. A workforce is being remobilized to complete construction, according to Cliffs. Because of mandatory social distancing and other newly implemented safety measures, a limited number of workers will be allowed on the job simultaneously. With the workforce restrictions, construction is projected to be complete in the fourth quarter.
“The demand for our steel, iron ore and metallics products has recovered dramatically over the past month, and in light of this, we are restarting Toledo and Tilden sooner than we originally expected,” Goncalves, said in a news release. “We suspended these operations in a way that allowed us to restart as easily and efficiently as possible, and that is what we will do. Our footprint is well situated to capitalize on the rapidly increasing demand from the automotive sector, which is occurring faster than our most aggressive expectations.”
Cleveland-Cliffs is a major player in Minnesota’s iron ore industry. It owns and operates United Taconite in Eveleth and Forbes and Northshore Mining Co. in Babbitt and Silver Bay. It’s also part owner in HibTac.
The plan remains for Northshore to restart by August and Cliffs doesn’t have any updates or changes to the estimated timing for a restart of Northshore Mining, according to Pat Persico, a Cliffs’ spokeswoman, earlier this month.
At the federal level, legislation that could lead to major infrastructure projects across the nation and a “Buy American,” provision within the bill, would also also help the iron ore and steel industry, said Kelsey Johnson, president of the Iron Mining Association.
“This is a positive sign that the iron ore and steel industries are starting to recover,” Johnson said of the Cliffs’ announcement. “It’s going to be a long road back, but the automotive and energy industries are showing signs that there will be a bounce back and an increase in domestic steel.”
The Tilden Mine, near Ishpeming, Mich., provides iron ore pellets to Cliffs’ AK Steel steelmaking facilities in Middletown, Ohio and Dearborn, Mich, according to Cliffs. Idled in mid-April, the Tilden had been expected to restart in July.
“It’s a little early,” said Ryan Underwood, USW Local 4974 president at Tilden Mine. “We expected it. But it’s good news.”
Lee Bloomquist contributed to this report.