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Uncertainty over taconite slowdown has Silver Bay on edge

Piles of taconite sit at Northshore Mining in Silver Bay.
MinnPost photo by Catherine Conlan
Piles of taconite sit at Northshore Mining in Silver Bay.

SILVER BAY — A sign in the Northwoods Café in Silver Bay warns patrons that “work boots are not allowed in the dining room.” But they were packed in the café side of the restaurant Wednesday morning as people came to talk about the latest news — a slowdown and possible layoffs — from Cliffs Natural Resources Inc.

“They were in here this morning,” said Sara Betzler, daughter of Northwoods owner Kathy Thompson. Betzler’s husband has worked at the Northshore Mining facility, owned by the company formerly known as Cleveland Cliffs, for 13 years. “There were a lot of people in here talking about it. There’s a lot of negativity.”

Silver Bay, a company town built by Reserve Mining in the 1950s, has seen its fortunes rise and fall with the mining industry in Northeastern Minnesota. On Wednesday, talk was of the latest news.

Economy leads to slowdown
Cliffs announced Tuesday that it would slow down production at Northshore Mining in Silver Bay and United Taconite in Forbes. In a statement, Donald Gallagher, president of Cliffs’ North American Business Unit, said the slowing economy was making the steel market “soften.”

While the release said there would be “work force adjustments” at the two locations, Cliffs spokeswoman Maureen Talarico said she had “no information on what those adjustments might be.”

“I’m optimistic that it’ll be temporary,” she said of the slowdown. “The financial crisis combined with the softening of the steel-making market I think was a double whammy. The good news is, we’re a stronger company than we were in the tough times of the 1990s and 2000. We have our coal production, we’re global now, we’ve weathered it before and we’ll get through this.”

The slowdown casts a shadow on what has been called a “bright spot” in the state’s economy.  Worldwide steel demand had boosted mining and transportation in Northeastern Minnesota recently, and several large projects are planned to expand mining operations on the Iron Range.  While none has been delayed because of the now softening market, the giddy caution some had felt about the expansions is now a little more cautious.

A familiar cycle
In Silver Bay, residents ready themselves for the cycle many are familiar with. “He’s not too worried,” Betzler said of her husband. “He said there are new people there, so he’s a little higher in seniority. But this kind of thing affects my mom’s business. Winter’s coming, too, and that alone affects the business. This is just something more.” 

Still, they would like more information as rumors fly in the café and around town. They said they had heard all stories about who might be laid off first, how many, and when a startup might come again.

“I know they can’t say a lot right now,” said Thompson. “They don’t want to panic.” But she said the uncertainty has a lot of people on edge.

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