Magnetation to Idle Minnesota Plant

The Kewatinn plant is Magnetation’s smallest and oldest plant and less efficient than the company’s two other Minnesota facilities. The plant extracts and processes iron-bearing tailings leftover from previous iron mining operations to produce high quality iron ore concentrate. Kewatinn was expected to produce 350,000 tonnes of iron ore concentrate in 2015. The lost tonnage will be made up by increased production at Magnetation’s other operations and outside purchases.

Matt Lehtinen, president and COO, said the company has to be focused on cutting cost of production.

Lehtinen told News Tribune, “Seven months ago we had industry analysts predicting $90 to $100 per ton of iron ore prices for the foreseeable future. Now, we’re at $62. No one saw this coming.”

Global oversupply has become a problem for North American iron ore operations, putting pressure on ore prices. Analysts continue to cut estimates for iron ore prices and Australia & New Zealand Banking Group Ltd. expects the surplus of iron ore to expand to 85 million tons in 2015 from 39 million tons in 2014.

In 2014 Minnesota mines produced 38.2 million tons of taconite, up .7 million from 2013 according to the Minnesota Department of Revenue. Added value operations like Magnetation, Mesabi Nugget and Mining Resources also saw production increase by nearly 100,000 tons. Essar Steel will be adding approximately seven million tons to the Minnesota annual production upon completion of its facility in Nashwauk.

Magnetation LLC is a joint venture between Magnetation, Inc. (50.1 percent owner) and AK Steel Corporation (49.9 percent owner). Magnetation LLC recovers high-quality iron ore concentrate from previously abandoned iron ore waste stockpiles and tailings basins. The company also owns three iron ore concentrate plants located in Keewatin, MN, Bovey, MN and Grand Rapids, MN, and a 3.0 million tonne per year iron ore pellet plant in Reynolds, IN.