‘If they go online, I will shut down a plant the same day’ Vuppuluri: ‘Very sad and pained to hear such a statement’
CLEVELAND — The Cliffs Natural Resources CEO said he will close one of the company’s operations on the Iron Range if the Essar Steel Minnesota taconite plant in Nashwauk goes into production.
“If they go online, I will shut down a plant up there the same day,” Lourenco Goncalves said in an exclusive interview with the Mesabi Daily News last Thursday. “We have fully planned for the worst case scenario.”
Essar Minnesota CEO Madhu Vuppuluri said in response on Saturday that he is “very saddened to hear that statement that could have such an impact on employees and communities of the Iron Range.”
The $1.9 billion India-based Essar project under construction is scheduled to begin producing taconite pellets in the second half of 2016, most likely the third quarter.
Cliffs owns and operates United Taconite in Eveleth and Forbes and Northshore’s mine in Babbitt and processing plant in Silver Bay, and manages Hibbing Taconite. UTac is curently idled, with only about 30 of its 420 workers on the job.
Essar officials contend they already have contracts in place for the pellets and the Nashwauk plant would not consume any current Iron Range taconite product.
They also point to the need to backfill pellets from Cliffs’ Empire Mine in Michigan, which will be closing next year.
But Goncalves says that’s bogus arithmetic. The Essar plant is slated to produce 7 million tons of pellets annually; Empire generates 2.7 million tons a year.
“It’s simple math. Empire does 2.7 million a year … where will the other 4.3 million come from? Math doesn’t even come close. Four-point-three million tons … UTac or Hibbing or Northshore, that’s where they are coming from.
One of the Minnesota pellet plants would shut down for good,” Goncalves said.
Vuppuluri said he’s “puzzled and pained” by such comments.
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