REGIONAL- More than 400 employees of Northshore Mining operations in Babbitt and Silver Bay are facing layoffs in May after Cleveland-Cliffs confirmed today the facilities will be idled at least into the fall.

The action comes as a result of an ongoing royalty fee dispute between the company and the Mesabi Trust, which receives payments based on the price and amount of taconite mined from the Peter Mitchell Mine in Babbitt.

Cliffs CEO Lourenco Goncalves said in an earnings call with investors that production of direct-reduced grade pellets will shift to the company’s Minorca Mine in Virginia.

"Because we are now able to produce (direct-reduced) grade pellets at Minorca, and mainly due to the ridiculous royalty structure we have in place with the Mesabi Trust, we will be idling all production at our Northshore Mine. No production, no shipments, no royalty payments," Goncalves said in the call.

Layoffs are expected for 410 of Northshore's 580 employees, Cliffs spokesperson Pat Persico said in an email to the News Tribune. Some will be hired at Cliffs' other Minnesota operations, she added.

More detail about this breaking news can be found in this article from MPR that appeared in the Duluth News Tribune: Cliffs to idle Northshore Mining as fight over royalty fees intensifies

A complete report will be published in the Feb. 18 edition of the Timberjay.