57
      Saturday
      85 / 62
      Sunday
      89 / 64
      Monday
      79 / 62

      Cliffs CEO: Permanent shutdown coming for Empire

      The next several years will be a time of transition on the Marquette Iron Range.

      Production at the Empire Mine will temporarily stop at the end of March. The previously announced layoffs mean 346 union employees will get pink slips, many for most of the summer.

      The Empire's future is bleak after that. Plans to permanently shut down the mine are underway.

      That is the word from Joseph Carrabba, the chairman, president and CEO of Cliffs Natural Resources. Tuesday morning, Carrabba updated key stakeholders of the Marquette Iron Range at Cliffs' annual State of the Company breakfast held at the Holiday Inn.

      "It's extremely painful to do, and I just want to assure you that Cliffs gets no gain out of shutting this facility down," said Carrabba.

      After 50 years of operation, there is not much ore left in the mine's reserves.

      "It's one of the great mines of the world, not just of the Upper Peninsula or the United States, but no ore body is infinite," Carrabba said.

      Cliffs has explored other ways to use the Empire, but Carrabba said the economics simply aren't there.

      "We want to make sure we do the best for the communities, we do the best for employees, and we do the best for Cliffs' shareholders," he said.

      The breakfast was hosted by the Lake Superior Community Partnership. Many partnership members attended, along with many vendors of the Empire and Tilden Mines, local elected officials and representatives of state and national leaders. LSCP Director Amy Clickner said the news about the Empire is unfortunate, but she is glad that Cliffs is giving the community plenty of notice.

      "A lot of times in economic development, you don't have the ability to plan for a cease of operations," said Clickner. "This gives us a chance to really work together to minimize the impact within the community."

      The status of the Empire's 706 employees is still unknown.

      "There's a transition team that just had their first meeting," Carrabba said. "We think we're well in advance of when the last day comes for the mine."

      Carrabba said that could be late 2014 or early 2015. One question asked at the breakfast was about what the community can do to prepare for the shutdown.

      "I think with the community, what we can do is stay open, stay transparent," he said. "I think we have to face this together. It's a loss for everybody with this, we just need to keep it open and work with this situation as best we can."

      In the meantime, the future is brighter for the neighboring Tilden Mine. Carrabba said it has decades of ore reserves left.

      "It's a cornerstone of the business; it's got good cash cost that goes with it," he said.

      Together, the mines have an annual economic impact of $879 million.

      Carrabba also addressed Cliffs' revenue decrease last year. The global price of iron ore dropped, reducing revenue by 11 percent compared to 2011.

      But Carrabba expects much better numbers in the first quarter of this year, as iron ore prices have risen in January and February.

      "Cautiously optimistic as we go into the remaining quarters from there," he said.