Cliffs curtails production at two mines

Declining demand for steel has prompted major iron ore producer Cliffs Natural Resources (CLF-n) to stop production at two mines in Minnesota.

Two furnaces at the Northshore mine and one furnace at the United Taconite mine will be closed for the time being, decreasing Cliffs’ production by 300,000 tons a month, and 2008 production to 23 million tons.

Cliffs president Donald Gallagher blamed the shutdown on the downturn in the North American economy.

“We have seen the steel market soften in recent weeks due to the slowdown,” Gallagher said in a statement. “While we regret having to take this action, production and demand must be balanced to meet customer needs.”

Northshore usually produces about 6 million tons per year, while United Taconite has the capacity to produce 5.5 million tons. The two mining operations combined employ about 1,000 people. The company has about 5,300 employees worldwide.

Cliffs, formerly Cleveland-Cliffs, changed its name after proposing a merger with coal producer, Alpha Natural Resources, in the summer. A shareholder vote to finalize the deal will occur on Nov. 21.