DULUTH, Minn. — U.S. Steel announced Thursday that it will reopen its shuttered Keetac taconite iron ore mine and processing center and sell taconite pellets to a third party.
The Keewatin operations closed in May 2015 amid a downturn in the U.S. iron and steel industries, leaving more than 400 people laid off.
Employees will be called back to work starting in January, and the company said it hopes to begin production in March.
Company officials in Pittsburgh said they have “reached agreements to supply iron ore pellets to third-party customers. U.S. Steel will adjust its iron ore pellet production in order to take full advantage of these business opportunities.”
Those adjustments include “a restart of the Keetac Plant,’’ the company said in its announcement.
The plant can produce about 6 million tons of taconite pellets annually.
U.S. Steel said it will supply its former Canadian steel mill but declined to elaborate.
“The third-party pellet sales include supplying U.S. Steel’s former Canadian operations,’’ said Erin DiPietro, U.S. Steel’s spokeswoman in Pittsburgh. “Outside of the agreement with our former Canadian operations, we do not discuss our commercial relationships related to other potential third-party pellet sales.”
The news came Thursday afternoon for the 360 union Steelworkers and about 50 managers of the plant. Some of those workers had taken temporary jobs at U.S. Steel’s nearby Minntac operations in Mountain Iron and others at other company facilities. About a dozen have been working at Keetac to keep the machines in working condition.
But many Keetac Steelworkers hadn’t worked for more than 19 months, said Cliff Tobey, president of United Steelworkers of America 2660.
“This is exciting news. We were hoping to hear this,’’ Tobey said, adding that the company has not explained details of the union callback or what company was buying the product. “They’ve (U.S. Steel) got this asset and, if they can sell the pellets, why not run it?”
Tobey said it’s not clear how many of the 400 workers will get their jobs back. But U.S. Rep. Rick Nolan said he was told about 200 employees are expected to be needed for the startup.
“In my conversations with U.S. Steel executives, it appears that this will bring back in the neighborhood of 200 good-paying jobs to our region? at its commencement?,’’ Nolan said in a statement.
Tobey said some workers may have already taken other jobs or even left the region.
“How many are still around or available or will come back, I don’t know. Some people may have moved on after this much time,’’ he said.
The move is unusual for U.S. Steel because the company usually doesn’t sell iron ore on the open market, instead using the ore it produces in Minnesota for its own U.S. steel mills.
It’s also unusual because it came just one day after a U.S. Steel official told the Iron Range Resources and Rehabilitation Board that he had no news on Keetac reopening.
Travis Kolari, Keetac plant manager for U.S. Steel, told the IRRRB on Wednesday that he remained “very, very hopeful’’ that the operation will reopen sometime soon but that demand and prices for specific steel products still haven’t rebounded enough to warrant the extra iron ore production.
“Things are starting to look more favorable,’’ Kolari said Wednesday.
As the company had said in the past, Kolari tied the reopening of Keetac production to the status of U.S. Steel’s Granite City Works near St. Louis which makes oil industry pipe.
But that link now appears to be broken, with the Granite City pipe mill still idle and a new customer stepping up to buy Keetac pellets.
The move was yet another step back toward better days for the Iron Range, which had been hit hard by competition from foreign steel and a rapid downturn in demand for U.S. iron ore in 2014 and 2015. That downturn led to nearly 2,000 Iron Range iron ore industry workers being laid off.
But 2016 has seen the reopening at Northshore Mining in Babbitt/Silver Bay and United Taconite in Eveleth/Forbes. The end of the year also saw Magnetation LLC apparently ready to emerge from bankruptcy with a new owner. And there’s new hope that the former Essar Steel project in Nashwauk, now called Mesabi Minerals, could emerge from bankruptcy and see work resume on that now $2.5 billion all-new mine and processing center.
“Keetac’s reopening is wonderful news for the Iron Range?,’’ Nolan said, adding that the Range recovery “is the result of a team effort with the mining companies, steelworkers, the Obama administration and those of us in Washington who have championed the cause of securing high tariffs and taxes on subpar, low-quality steel subsidized by foreign governments and dumped into our market by trade-cheater nations,’’ Nolan said.
“The collective voice of American workers to combat illegal steel dumping is producing results,” said U.S. Sen. Amy Klobuchar. “As we head into the new year, this announcement generates both a renewed confidence for the U.S. steel industry to bring back more jobs and a renewed commitment for those of us who continue to fight for a level playing field for American workers. We cannot rest until every worker is back on the job.”