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Mine Closing Rocks Iron Range
by Tom Scheck
May 24, 2000
Click for audio RealAudio 3.0

The LTV Steel Company announced that it will permanently shut down its taconite plant in Hoyt Lakes. Company officials say they had to close the plant because it is obsolete, expensive, and the quality of the ore it produces has deteriorated in the past few years.

Listen to the news conference by Richard Hipple, head of LTV steel.

See the MPR series, After the Mines.

Listento the May 26, 2000 story from Stephanie Hemphill about the future of Hoyt Lakes.

FOR DECADES, the taconite mines in the Mesabi Iron Range helped feed the blast furnaces of the country's steel industries. The oldest is the LTV Steel Minings plant at Hoyt Lakes. LTV Company President Richard Hipple says problems caused by the facilities age and the declining quality of the ore feeding the plant is forcing the closure.

"The core part of the process, the pellet plant is based on obsolete shaft furnace technology versus the modern straight gait rate and kiln technology," Hipple said. "The quality of ore body has steadily declined and has a high level of impurities. The net result is a very high cost operation which produces low quality pellets."

Hipple says the company would have to invest $500 million in the short term to make the mine only partially competitive again. He says the company will stop its stripping operations this Sunday and will lay off the first round of 120 workers by the end of August. He says all 1,400 workers will lose their jobs by the middle of next year.

Officials say the impact on the city of Hoyt Lakes, which has a population of about 2,000, is substantial. Hipple estimates the average wage at the plant is about $60,000 a year. Northeastern Minnesota's economy relies on the four t's - tourism, timber, transportation by way of shipping, and taconite.

Hoyt Lakes City Clerk Richard Bradford says losing one of those four t's is shocking to the city. "To have an employer of this magnitude that the city and residents so heavily depend on is obviously quite disturbing and it will have a lot of repercussions in a lot of different areas," Bradford says.

Bradford says those areas include the tax base, of which LTV is a major contributor. He wouldn't even estimate the potential losses. He says city and state officials were caught off guard by the news, but will work to find another industry to replace LTV.

State Senator Doug Johnson represents the Hoyt Lakes community. He says he'll encourage Governor Ventura to create a public-private partnership to keep the mine running. He's also looking to see if the community can dip into the state's 2002 fund, an $80 million reserve earmarked in the late '70s to assist mining communities as they grow older.

About the LTV Plant
LTV Steel Mining Company operates a taconite mining and processing operation in Hoyt Lakes, Minnesota, 60 miles north of Duluth on the Mesabi Iron Range. Annual capacity is 7.5 million tons.

LTV Steel Mining produces taconite pellets 24 hours a day, 365 days a year. Pellets are shipped by a company-owned railroad 74 miles to Taconite Harbor. There the pellets are loaded onto ore boats, which can be as long as three football fields and carry as much as 60,000 tons of high-quality pellets.

The pellets are transported to LTV Steel's Cleveland and Indiana Harbor Works blast furnaces. In winter, when the Great Lakes freeze and shipping is halted, the pellets are stockpiled for shipment in the spring.
Source: LTV Corporation
Johnson says he'll start working with other officials to make sure the community is on solid ground in a couple of days, once he deals with the initial shock that the mine is closing. "The workers in the taconite and iron ore mines helped fight two world wars," says Johnson. "The steel that was used in the major wars that kept freedom for our country, those workers have to be thanked and it seems like they're not getting that kind of thanks as they lose their jobs in mining and producing the steel."

And those workers are placing part of the blame on the federal government. During MPR's program Midday, District 11 Steel Workers Union Director David Foster said there's a direct connection between the plant's closure and the federal government's push for global trade. He says countries in South America, Eastern Europe and Asia are exploiting workers. And he says the countries are also selling steel in the United States at below production cost prices.

Foster says the closure comes at an ironic time. Since Congress was voting on normalizing trade with China, a measure his organization opposed.

Foster says the union is working with LTV and Cleveland Cliffs, a management services agency, to seek other uses for the LTV mine, including processing copper and nickel. But he says any decision will be years down the road.

Officials at LTV say they'll shift their taconite operation to the Northstone Mining Company in Silver Bay and another plant in Michigan where the quality of the taconite is higher. During his press conference, Hipple stressed the closure was not the result of what he called a people problem. LTV will offer preferential hiring at its other midwestern plants to the laid off workers.