Cliffs to curtail iron ore production at two Minnesota 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 idled for the time being, decreasing Cliff’s production by 300,000 tons a month, lowering 2008 production to 23 million tons.

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

“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 of iron ore pellets per year while United Taconite has the capacity to produce 5.5 million tons. The two mining operations employ about 1,000 people combined. The company employs about 5,300 people 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.