Northshore sheds shutdown phase

• Northshore Mining

Silver Bay City Council member Dave Gustafson, who worked at Reserve Mining for about 30 years before the big shutdown in 1986, said today’s Northshore serves as the backbone to the community. Matt Suoja

Talk about it

There’s plenty of reason to celebrate up the Shore this weekend. It’s Bay Days in Silver Bay and Beaver Bay.

But there’s also cause to celebrate the uptick in the mining industry that built Silver Bay and provides jobs throughout the region. Despite a flagging economy, things are humming along at Northshore Mining.

The Cliffs Natural Resources facility made it through a 2009 that included a shutdown and a downturn in its overall profits. Now, there is an upswing in progress.

Last summer Northshore closed for three months because of a lack of demand for ore pellets. Over the winter, Northshore began hiring again as demand rose and it hasn’t stopped in both the Silver Bay and Babbitt plants. There were new employees starting this week.

Maureen Talarico, spokeswoman for Cliffs, said the iron ore business is going strong and they are in a hiring mode while being “cautiously optimistic.” If it’s any sign of success, Cliffs purchased a $5 million a rotary car dump that helps dump pellets out of train cars at the Silver Bay plant.

There are 400 employees at the Silver Bay plant. The city population is about 2,000.

Financially, things had been pretty rough for Cliffs. It had a 35-percent decrease in revenue from 2008 to 2009. But this year revenue is at $727.7 million for the first quarter, up 57 percent from the same quarter last year.

It helps that Mesabi Nugget began producing in January and continues to buy concentrated ore from the Northshore plant. Anyone driving on Forest Highway 11 has seen the trucks headed for Hoyt Lakes. Mesabi was taking in as many as 60 truck a day before its startup in January.

Talarico said Cliffs tries to hire as many North Shore residents as possible for its plants – which leads to a $162 million annual local impact through payroll, services, and supply purchases.

“We try to hire people with a minimum of two years of college,” she said. Talarico said experience and military background also play a role in the hiring process.

Rick Goutermont, a Lake County commissioner and Northshore employee off and on since the 1970s, said the Silver Bay plant is running out of longtime employees — mainly because of retirements. He said there is much new blood in the plant that first opened in the early 1950s.

Silver Bay council member Joanne Johnson worked at Northshore for 14 years, retiring a few years ago. Her husband also retired from there. She said it was never a place she thought she would work, because most of her jobs had been with the public. She was also the only woman in her crew.

“They were so good,” she said. “I worked with the best crew anybody could work with.”

Silver Bay council member Dave Gustafson, who worked at Reserve Mining for about 30 years before the big shutdown in 1986, said today’s Northshore serves as the backbone to the community. But he never really felt like he had job security there.

The mining industry has been so topsy-turvy the past 20 years, he said, he told his kids to stay out of the business and pursue other avenues.

The future

Cliffs has announced the acquisition of a majority of Spider Resources, which could lead to a chromite mine in the “Ring of Fire” in northern Ontario.

Chromite is the chief ore of the mineral chromium, which is smelted into ferrochromium for use in making stainless steel and other alloys. According to the U.S. Geological Survey, about 19.2 million tons of chromite was mined in 2006, with mines in South Africa, India, and Kazakhstan producing about three-quarters of the total. In 2009, the U.S. consumed about 7 percent of the world’s chromite, according to the USGS. The U.S. has one chromite mine, in Oregon.

“It’s a very rugged area,” Talarico said of the land in Canada.

A company run by a Knife River family is helping to determine whether Cliffs can reach the roadless area by train. Krech Ojard and Associates of Duluth is studying the feasibility of building a 210-mile-long railroad from near Nakina, Ontario, and north to the McFaulds Lake area.

In October, Cliff’s announced plans for an expansion by becoming the sole owner of Wabush Mines with operations in Newfoundland, Labrador and Quebec.

Joseph Carrabba, chairman and CEO of Cliffs, told shareholders in the 2009 annual report that Cliffs was enjoying a “healthier business environment” compared to “dismal” first half of 2009.

Employees at Northshore couldn’t agree more.

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