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After a banner 2008 with record prices, the taconite industry is back in the proverbial hole, thanks to the global recession.
In May, most taconite mines had either slowed or shut down production as stockpiles lingered at Lake Superior loading docks. Last fall, Cliffs Natural Resources announced production cutbacks at mines in Silver Bay and Eveleth, and the company decided to stop all production from one mine until at least early July. In May, the Cliffs mine in Hibbing also began a 15-week shutdown. U.S. Steel closed its taconite mine in Keewatin in December, affecting 380 workers; after a first-quarter loss of $439 million, the company also cut back production at its mine in Virginia, laying off almost 600 workers in May. About half were called back in June on a short-term basis.
The industry received some good news in June, when a pilot program delivered 5,000 tons of crushed taconite for use as road aggregate. Taconite is harder than traditional dolomite and limestone and could extend the life span of highway and rail infrastructure, according to researchers.
Ron Wirtz is a Minneapolis Fed regional outreach director. Ron tracks current business conditions, with a focus on employment and wages, construction, real estate, consumer spending, and tourism. In this role, he networks with businesses in the Bank’s six-state region and gives frequent speeches on economic conditions. Follow him on Twitter @RonWirtz.
