Oglebay Norton profitability buoyed by U.S. steel industry

According to President Renold Thompson, iron ore pellet production from Eveleth Mines rose by 20% last year, the highest level in six years. Consolidated net income also jumped sharply to $4.95 million, up from $559,000 the year before.

Oglebay owns interests in and manages the taconite mining and pelletizing operations of Eveleth Mines which in turn is owned by Eveleth Taconite Company and Eveleth Expansion Company. Mining and processing operations are located near Eveleth, Minn., in the Mesabi iron range.

Iron ore pellet production is projected to increase from 4.2 million tons in 1988 to five million tons this year and the company expects steel demand to be strong well into the third quarter. A second production line was activated in June 1988 and it operated at full capacity for the balance of the year. So sufficient pellet-making capacity is available to meet anticipated demand.

Improved power, labor, and railroad contracts reduced production costs, adding to profits, as did a drop in royalty payments and a lower U.S. dollar. Later this year, an ore screening system at the Fairlane plant will be replaced with state-of- the-art equipment which should improve throughput, reduce screen maintenance costs, and improve pellet quality by decreasing silica content.

The company’s industrial minerals segment posted a strong performance as well.

Central Silica Company benefited from a two-year effort to maximize the potential of a changing silica market and reach new customers through expanded rail connections. California Silica withdrew from the glass market in favor of recreational and construction markets. Sales of oil and gas well sand increased despite depressed levels of oil and gas production in the United States.

Bituminous coal sales from Saginaw Mining in southern Ohio were virtually unchanged but tough laws proposed for a new Clean Air Act, which is designed to curb acid rain, could limit production at Saginaw or close the operation down, Thompson said.

Iron ore sales accounted for an operating profit of $7.6 million, coal $2.7 million, and industrial minerals, $1.9 million. Transportation and transfer facilities, including a fleet of vessels to transport iron ore, coal and other mineral commodities plus its rail and barge coal-loading facilities generated an operating profit of $7.3 million.

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