DULUTH — Cleveland-Cliffs will buy ArcelorMittal USA for $1.4 billion, a move that will greatly expand Cliffs' Iron Range ore operations.
In a news release early Monday morning, Sept. 27, Cliffs confirmed the merger which was first reported by Reuters on Sunday.
On the Iron Range, Cliffs would acquire ArcelorMittal's Minorca Mine in Virginia and its 62.3% stake in joint-venture Hibbing Taconite. Cliffs already has a 23% stake in Hibbing Taconite and owns and operates United Taconite in Eveleth and Forbes and Northshore Mining in Silver Bay and Babbitt.
ArcelorMittal took over management of Hibbing Taconite last year after Cliffs had operated it for more than 40 years. U.S. Steel owns the remaining 14.7% stake in the mine and pellet processing plant.
Chris Johnson, a maintenance worker at Hibbing Taconite and president of United Steelworkers Local 2705, which represents workers at Hibbing Taconite, said union members were feeling "happy optimism" about returning to work under Cliffs management.
"A lot of people were happy with the way (Cliffs) ran things and were happy with what was going on," Johnson said. "And then, obviously, last August it changed (to ArcelorMittal). We've had some things change the way (ArcelorMittal) does stuff that wasn't real favorable by our membership."
Johnson pointed mainly to "managing styles" and having to do things over phone and computer that used to be handled internally.
Cliffs would also acquire ArcelorMittal's 17 steelmaking, finishing or cokemaking facilities across the U.S., including the Indiana Harbor and Burns Harbor steel plants in Indiana.
With ArcelorMittal's Iron Range assets in hand, Cliffs could produce up to 28 million long tons of iron ore pellets per year, the most in North America. It would also become the continent's largest flat-rolled steel producer with a combined 17 million net tons shipped in 2019.
The merger would also mean Cliffs operates four of the six mines and pellet plants on the Iron Range. U.S. Steel owns and operates Minntac in Mountain Iron and Keetac in Keewatin. Keetac has been indefinitely idled since the beginning of the pandemic.
Hibbing Taconite employs approximately 750 people and Minorca employs approximately 350 people. Workers at both are represented by the United Steelworkers union.
Harold Anderson, an electrician at Minorca and president of United Steelworkers Local 6115, which represents employees at Minorca, said that plant is currently in the middle of a routine shutdown and he's urging union members to focus on their work and not worry about the purchase.
"That's the difficult part right now because everybody's a little nervous about what's going to happen with their health care, what's going to happen with our pensions and wages," Anderson said.
Anderson isn't worried about the future of Minorca under Cliffs because the mine and pellet plant supplies blast furnace 7 at Indiana Harbor with flux pellets.
He said he's hopeful for more profit sharing and "a bigger voice at the table" when asking the company for investments in the mines and plants.
Johnson, of Local 2705 and Hibbing Taconite, is hoping new management and majority owner means a longer mine life at Hibbing Taconite, which is expected to run out of ore by early 2025.
"It's a worry," Johnson said of mine's uncertain future beyond 2025. "It causes us to lose some people to other mining companies and it deters people from wanting to seek employment at our facility."