Magnetation LLC announced yesterday that it is considering shutting down its Minnesota based iron ore concentrate plants and rail loading facilities by September 30th.
Magnetation owns three iron ore concentrate plants, located in Keewatin, Bovey, and Grand Rapids, Minnesota.
Without additional financing or a third party wholesale purchase of Magnetation, the company will enter into Bankruptcy Court on or before September 30. Magnetation has secured lenders for the shutdown process of its facilities, which also includes a Pellet Mine in Reynolds, Indiana. Operations will continue normally until that time.
“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,” Larry Lehtinen, CEO of Magnetation said in a press release, “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.”
Should Magnetation indeed wind down their operations, 360 employees will be affected by the shutdown according to Magnetation President Matthew Lehtinen.
“Magnetation LLC entered into this settlement agreement to protect our stakeholders in the event an investor is not secured to emerge from bankruptcy,” Matthew Lehtinen wrote in a prepared statement, “Now that this agreement is in place, our sole focus is to continue to safely produce and ship high quality pellets until the operations potentially shutdown and work closely with several interested parties that are currently evaluating an investment into Magnetation LLC to avoid a shutdown of our plants.”
Magnetation and four affiliate companies filed for Chapter 11 bankruptcy in May of 2015, after restructuring a deal with bondholders owed $425 million, reported the Wall Street Journal. The company lost about $16 million on $96 million in revenue in 2014.