Ore to take a Major hit in 2013

[GLC 392]

In Duluth Mn's tribune today, Cleveland Cliffs announced that it will be permanently closing the Empire mine in the upper peninsula come April or May. It also says that Cliffs will be closing its Northshore Mining operation in Silver Bay and Babbit MN for the 2013 season which means the railroad will also be shut down. The story can be found here. http://www.duluthnewstribune.com/event/ ... id/250262/

[AARR]

Both sites may reopen if market conditions improve,

Does Cliff sell to foriegn markets or is everything used in the U.S.?

Cliffs also will permanently shut down its Empire Mine in Michigan sometime during April or May, which will see 500 employees lose their jobs,

This just sucks!

[Crow T Robot]

Wow that should help the economic outlook of the Upper Penn. They need more good news like this.. Is there any reasoning behind closing the mine? Guess I should try and get up there and try and see one of the last runs to Escanaba..

[AARR]

The article clearly states TEMPORARILY closing the operations due to market conditions. When conditions improve the mines will reopen. I have to assume market conditions means a low price for steel right now and demand down WORLDWIDE.
Employees will receive suplimental unemployment benefits, the amounts to be governed by seniority.
Not good but not all that bad for the mine workers but it will hit LS&I/CN employees in the north country.

Silver Bay and Babbit it temporarily closing until market improves. Empire is permanent.

Anyone know how this will affect LS&I and CN?

[michiganlover]

Silver Bay and Babbit it temporarily closing until market improves. Empire is permanent.

The article has since been edited to read:

"Cliffs also will also temporarily shut down its Empire Mine in Michigan sometime during April or May, which will see 500 employees lose their jobs, Karnowski said. The shutdown will last through the summer, Karnowski said. "

Temporary shutdowns of the Empire Mine are not out of the ordinary. It happens quite often that the mine doesn't need to operate at full capacity for the entire year.

[trnwatcher]

Didn't one of the mine's up there announce earlier this fall that they where going to reopen a pit that's been closed for sometime and that CN was also going to be re-installing track on an abandoned ROW into another area there in the UP?

[AARR]

Didn't one of the mine's up there announce earlier this fall that they where going to reopen a pit that's been closed for sometime and that CN was also going to be re-installing track on an abandoned ROW into another area there in the UP?

Yes, that mine is west of Empire and Tilden and will mine copper IIRC. There's a thread around here about it.

[trnwatcher]

Didn't one of the mine's up there announce earlier this fall that they where going to reopen a pit that's been closed for sometime and that CN was also going to be re-installing track on an abandoned ROW into another area there in the UP?

Yes, that mine is west of Empire and Tilden and will mine copper IIRC. There's a thread around here about it.

Thanks AARR. I knew I read it somewhere recently. Just couldn't remember if it was here.

[JDavis21835]

Not only are there economic forces in play here, but also seasonal. Typically, work at the steel mills using these raw products get shut down during the summer. This is done to allow construction and maintenance work to be done on their facilities. This is also why you see scrap prices, and shipments drop in the summer as well.

[AARR]

Didn't one of the mine's up there announce earlier this fall that they where going to reopen a pit that's been closed for sometime and that CN was also going to be re-installing track on an abandoned ROW into another area there in the UP?

Yes, that mine is west of Empire and Tilden and will mine copper IIRC. There's a thread around here about it.

Thanks AARR. I knew I read it somewhere recently. Just couldn't remember if it was here.

Here you go tw viewtopic.php?f=3&t=25480&p=241817&hili ... al#p241817

[GLC 392]

It may say they are temp. Closing empire but they are planning on closing it down for good. I got talking with a few cliffs employees while i was up there. CN is running no ore trains at this time other then the all rail ore for the sault. When i was up there the docks in Escanaba were shut down other then loading ships from the stock pile. There hadnt been a trqin in there for quite some time and all the ore cars were stored.... As for over seas market they do send to other countries but that comes out of there mines in Australia and Brazil. All the stuff in the states stays here or goes to Canada to my knowledge.

[SW]

Nothing in the Marquette Mining Journal yet, but googled WLUC (TV6 - Marquette) and found this:
http://www.uppermichiganssource.com/new ... ?id=827095
PALMER -- Cliffs Natural Resources has announced that it will temporarily idle production at its Empire Mine operation beginning the second quarter of 2013 in the form of an extended summer shutdown.

The shut down will impact approximately 500 employees at the mine.

Full-year 2013 expected sales volumes for U.S. Iron Ore remain unchanged at 19-20 million tons as previously disclosed by the Company.

Ms. Laurie Brlas, President Global Operations added, "Unfortunately the U.S. Iron Ore production curtailments will affect many of our employees. However, at this time, we believe it is prudent and necessary to match our production volumes with market demand. We will remain operationally flexible to ramp up production volumes throughout the year if the demand increases."

Cliffs continues to work through its 2013 consolidated business plan and expects to disclose its full-year company-wide assumptions and expectations as part of its fourth-quarter 2012 results. The company's preliminary 2013 capital expenditures are estimated to be in a range of approximately $700-$800 million.

Cliffs is also curtailing production at its Northshore Mining operation in Minnesota affecting 125 employees.

[BnOEngr]

Wonder how this will affect our K185s to Middletown.

[MagnumForce]

So much steel is in the form of Mini mills using all scrap this is really no surprise. Scrap price have held pretty steady at this time. This is far preferable from an overall perspective to a tripling of the prices in steel, scrap and iron that we saw in 2007, right before the recession.

[Standard Railfan]

As for the Empire mine, I believe that the current shut down is related to a blast furnace rebuild at a mill owned by their largest customer according to a December 6, 2011 news article in "Mining Journal".

Another "Mining Journal" article from January 20, 2012 indicates that Cliffs capital plan forecasts the Empire mine to run through 2015. Planning for the mines future beyond 2015 is ongoing. The Empire mine is near exhaustion. There is a persistent story in the Marquette area that part of the spoil pile is on top of the ore body making the cost of ore extraction too high to meet the market prices.

The new Nickel and Copper mine being built by Rio Tinto does not have direct rail service. The line CN is reestablishing with help from a well know UP shortline railroader is to the former Humbolt mine west of Ishpeming. The former taconite/ gold ore processing facility is being rebuilt to concentrate the ore from the new nickel copper mine.

[SW]

Latest from the Associated Press, as reported in the Detroit News:
http://www.detroitnews.com/article/2013 ... z2MhxGP96k

Marquette — An executive with the company that operates the Empire Mine in the central Upper Peninsula says its operations will decrease in coming months and cease altogether in late 2014 or early 2015.

Cliffs Natural Resources Inc. chief executive Joseph Carrabba spoke about the plans Monday in Marquette. The Mining Journal reports that he says the closing "will be a very progressive process."

The Empire Mine opened in 1963 and has produced 260 million tons of iron ore. Carrabba says it's been a "huge success" but says its viability is declining.

Cliffs employs about 830 people at the Empire Mine and about 730 at nearby Tilden Mine.
The Cleveland-based company said in November it expected to lay off about 500 workers from the mines in April.

[hoborich]

This likely will affect the lake freighters also. And this doesn't say much for the alleged recovery.

[conrailman75]

Wasn't Empire one of the biggest customers on the LS&I? Could losing this business lead to a complete shutdown and possible abandonment or do they have other customers to serve that could keep them open?

[CAT345C]

Wasn't Empire one of the biggest customers on the LS&I? Could losing this business lead to a complete shutdown and possible abandonment or do they have other customers to serve that could keep them open?

The Empire is mostly served by the CN. The Tilden is the newer mine that is solely served by the LS&I. I have been hearing for the last decade that the Empire only had about 10-15 years of material left to be mined out of it. That comes out of the mouths of the geologist that gives the tours put in by Cliffs. I highly recommend the 10 dollar tour put in during the summers it's top notch! Keep in mind if the empire does shut down there are deposits surveyed to the south/south east between Palmer and Gwinn that can be mined.

[Saturnalia]

All mines will run out of ore eventually...