Magnetation set to close down operations

Magnetation LLC, Grand Rapids, Minnesota, has announced that it is planning to shut down its Minnesota iron ore concentrate plant, as well as its rail loading facility and pellet plant located in Reynolds, Indiana, as soon as September 30, 2016.

In a release, the company notes that its announcement initiates compliance with the U.S. Department of Labor's Worker Adjustment and Retraining Notification (WARN) Act by notifying local officials and the International Union of Operating Engineers Local 49 of production curtailments and employee reductions.

WARN Act notification is required 60 days in advance under certain circumstances when there is a potential for layoffs of more than 50 employees for a period in excess of six months.

In connection with the potential shutdown, Magnetation has entered into an agreement with AK Steel Corp., Magnetation Inc. and the company's senior secured lenders to cease operations and implement a wind-down process. Absent securing additional financing and/or a third party purchaser of its businesses, the company says it will be seeking Bankruptcy Court approval of the agreement on or before September 30, 2016. 

"While this was a difficult decision, the company believes that, in light of current circumstances, preparing for a safe and orderly wind-down while we continue to seek an alternative to a shutdown is the best course of action to support what is in the best interests of our employees, creditors and other critical constituents," says Larry Lehtinen, CEO of Magnetation. "As a result, we are communicating the proper notifications to our employees and the communities. We will be working closely with the appropriate governmental agencies to assist any affected employees who would be laid off if this shutdown is implemented."

Magnetation LLC. is a joint venture between Magnetation Inc. (50.1 percent owner) and AK Steel Corp. (49.9 percent owner).