Magnetation LLC (Magnetation) announced today that due to low global iron ore prices it will indefinitely idle its Plant 1 iron ore concentrate facility located in Keewatin, MN by the end of March 2015, placing the plant on a care and maintenance program. The global price of iron ore has fallen by more than fifty percent over the past 18 months.
"Due to the unprecedented collapse in iron ore prices over the past year and the iron ore market uncertainty moving forward, we believe it is in our best interest to indefinitely idle our highest cost operation," said Larry Lehtinen, CEO of Magnetation. "There is no way to know how long global iron ore prices will remain at the present depressed levels and consequently we are unsure of the duration of this idling. Some affected workers and staff may have opportunities to be employed by other areas of the company and we will be working closely with the appropriate governmental agencies to assist the employees who will be laid off as a result of this unfortunate event."
Plant 1 was scheduled to produce 350,000 tonnes of iron ore concentrate in 2015 and is Magnetation's smallest and highest cost operation. The Plant 1 idling is expected to improve Magnetation's cost competitiveness without an impact on the Company's ability to fulfill customer needs. The iron ore previously produced by Plant 1 will be replaced by increased production at the Company's other operations and outside purchases.
Magnetation also owns and operates Plant 2 located in Bovey, MN and Plant 4 located in Grand Rapids, MN. Plant 4 began operating in the fourth quarter of 2014. Magnetation also owns and operates a 3.0 million tonne per year iron ore pellet plant located in Reynolds, IN.
Magnetation LLC is a joint venture between Magnetation, Inc. (50.1% owner) and AK Steel Corporation (49.9% owner). Magnetation LLC 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 a 3.0 million tonne per year iron ore pellet plant in Reynolds, IN.