Closure to Bring the End of Taconite Harbor
05/25:
LTV Steel officials announced Wednesday their intention to close LTV Steel Mining Company's taconite mine and pellet plant located in Hoyt Lakes, Minnesota. Closure of the facility is scheduled for mid-2001. LTV has signed a contract with Cleveland-Cliffs to supply pellets that the Hoyt Lakes plant would typically provide. This production will come from Cliffs properties in Michigan and Minnesota.
LTV Steel Mining is reportedly no longer able to provide LTV Steel with taconite pellets of competitive quality or cost. LTV Steel said that its blast furnaces are experiencing lower levels of productivity and higher costs as a result of operating problems related to poor taconite pellet quality.
The company operates the only remaining shaft furnaces in the North American taconite pellet industry. These maintenance-intensive furnaces are not competitive with modern straight grate or grate kiln furnace operations, which produce better quality pellets at lower cost.
LTV Steel Mining is the oldest continuously operating taconite mining operation on the Minnesota Iron Range. It employs approximately 1,400 people. 1999 production was 7 million tons.
LTV Steel Mining Co. mines taconite ore near Hoyt Lakes, Minn. where it is processed into pellets. The product is moved by rail to Taconite Harbor on Lake Superior's North Shore, and loaded aboard Great Lakes freighters.
The company's shutdown means shipping in and out of Taconite Harbor will cease. Pellets will no longer be shipped from the port, many cargoes of which were carried by vessels from Interlake Steamship Company and Oglebay Norton Company.
LTV also operates a power generating station at Taconite Harbor that receives coal from Midwest Energy Terminal in Superior. These cargoes generally are carried by boats from Oglebay Norton Company or American Steamship Company. LTV's announcement about the mine closing did not discuss the power plant's future, so it remains open to speculation. One possibility: Minnesota Power, a Duluth-based utility, has in recent months talked about acquiring more
generating capacity. If it or another company purchased the LTV power plant, coal shipments to Taconite Harbor could resume.
Much of the vessel business lost at Taconite Harbor may be gained at other ports. Mines operated by Cleveland Cliffs ship pellets from Silver Bay, Minn., Allouez, WI., and Marquette and Escanaba, Mich. Cliffs has entered into an agreement with LTV that will make Cliffs the principal supplier of iron ore pellets purchased by LTV for a 10-year period beginning in 2000. Sales over the 10-year contract term are expected to total more than 50 million tons based on LTV's current requirements.
LTV Steel Mining Company began operation in 1957 as the Erie Mining Company. It has produced over 312 million tons of taconite pellets. The mine was intended to produce 7.5 million tons per year. Capacity was increased to 10.3 million tons in 1967 and production peaked at 11.3 million tons in 1973. Employment peaked in 1970 with over 3,000 people. However, by 1983, production had declined to 2.1 million tons and employment had declined severely. LTV acquired full ownership of the facility in mid-1986. Under LTV Steel ownership the mine consistently produced between 6.5 and 7.5 million tons annually, employment was doubled, and facilities modernized, including annual capital investments of approximately $20 million over the past five years. In 1991 LTV Steel Mining restarted the power plant at Taconite Harbor to provide lower cost electrical energy for the plant in Hoyt Lakes.
Visit www.ltvsteel.com for the complete press release.
Reported by: Al Miller, Dave Schauer and Mike Cleary
