Steel Products Prices North America
Magnetation Announces Potential Shutdown of its Minnesota and Indiana Facilities
Written by Sandy Williams
August 27, 2016
Iron ore mining company Magnetation announced on Friday that it may shutdown its Minnesota iron ore concentrate plant, rail loading facility and Pellet Plant located in Reynolds, Indiana on or after September 30, 2016. The company intends to continue normal operations until that time.
WARN notices have been issued to local officials and the International Union of Operating Engineers Local 49 regarding potential layoffs and production curtailment.
Magnetation LLC, is a joint venture between 51.1 percent owner Magnetation Inc. and 49.9 percent owner AK Steel. The company has entered an agreement with the joint partners and senior secured lenders to cease operations and begin a wind-down process. If Magnetation fails to secure additional financing or a purchaser for the business, it will seek Bankruptcy Court approval of the agreement on or before September 30, 2016.
“While this was a difficult decision, the Company believes that, in light of current circumstances, preparing for a safe and orderly wind-down while we continue to seek an alternative to a shutdown is the best course of action to support what is in the best interests of our employees, creditors and other critical constituents,” said Larry Lehtinen, CEO of Magnetation. “As a result, we are communicating the proper notifications to our employees and the communities. We will be working closely with the appropriate governmental agencies to assist any affected employees who would be laid off if this shutdown is implemented.”
Magnetation LLC, founded in 2006, recovers high-quality iron ore concentrate from previously abandoned iron ore waste stockpiles and tailings basins. Magnetation LLC owns three iron ore concentrate plants located in Keewatin, MN, Bovey, MN and Grand Rapids, MN, and an iron ore pellet plant in Reynolds, IN.
The company idled the Keewatin plant in March 2015, and the Bovey plant in January 2016. On May 5, 2016, Magnetation filed petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code in the District of Minnesota.
Sandy Williams
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