fedgazette

Iron ore milestone shows rebounding industry

Michigan State Roundup

Published September 1, 2006  |  September 2006 issue

This summer, the Upper Harbor dock in Marquette loaded the 400 millionth ton of iron ore. The dock is operated by a division of Cleveland-Cliffs, which offloads ore from its Empire and Tilden mines in the U.P. for transport to steel mills, mostly in the Great Lakes region.

The milestone was reached more quickly than many would have guessed just a few years ago, when the industry was suffering through yet another downturn. Cleveland-Cliffs, the largest iron ore producer in North America, watched production fall at its two U.P. mines from about 12 million tons in 2001 to just 8 million tons the next year. Hundreds of workers at both the Empire and Tilden mines lost their jobs, and the Empire mine shut down completely for a while.

But total U.P. production and profits at Cleveland-Cliffs have rebounded strongly thanks to robust worldwide demand for steel (and thus iron ore) for several years running. Last year, annual operating income at the company—which also runs four Minnesota mines and is majority owner of the third-largest iron ore producer in Australia—tripled, and total revenues grew 45 percent.

Total production at the U.P. mines also rebounded, jumping back to more than 13 million tons by last year. That number is expected to decline slightly this year, in part because of repair downtime at Tilden. But company officials have said the decline will be partially offset by higher ore pricing.

Ronald A. Wirtz

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