October 16, 2008

US taconite industry expects strong 2008

Minnesota taconite industry officials recently said that 2008 has a promising outlook, a stark contrast from about five years ago, when taconite plants in northeastern Minnesota were forced to close when dozens of domestic steel companies filed for bankruptcy. But consolidation within the industry has made it stronger. A surging worldwide demand for iron ore has also made iron ore properties more valuable.

Mr Craig Pagel president of the Iron Mining Association of Minnesota trade group said “The taconite mining outlook probably has not looked this good in a long time."

Six taconite plants in northeastern Minnesota have said they expect to operate at or beyond designed capacity in 2008. Plant owners are projecting that all six facilities will operate at or beyond designed capacity. The industry will get a boost in the first quarter when Cleveland-Cliffs' Northshore Mining's processing plant in Silver Bay restarts idled lines, adding 800,000 tons to its annual capacity. Production for 2008 is projected to increase to about 38.5 million tons.

Taconite production for 2007 is expected to come in around 37.6 million tons of pellets down slightly from 38.9 million tons in 2006. The decline was due in part to a water freeze up at Hibbing Taconite early this year that shut down the facility for about a month and cost that plant hundreds of thousands of production tons.