Cliffs Natural Resources has announced the temporarily idling of iron ore pellet production at its Northshore Mining operation in Minnesota, US.

The idling is set to take place by 1 December due to the continuing oversupply of iron ore in the US and markets worldwide. It will make around 540 employees redundant.

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Consisting of a mine and a taconite pellet processing facility located in Minnesota, the Northshore Mining iron ore operation will have minimal staffing during the temporary idle period.

The staff will be responsible for basic maintenance duties and for ongoing work in a bid to support the DR-grade pellet trials.

"The historic high tonnage of foreign steel dumped into the US continues to negatively impact the steel production levels of our domestic customers."

Cliffs Natural Resources chairman, president and CEO Lourenco Goncalves said: "The historic high tonnage of foreign steel dumped into the US continues to negatively impact the steel production levels of our domestic customers.

"As our pellet inventory at both Northshore and United Taconite is adequate to meet current customer demand, we will be able to optimise our working capital and cash-flow by temporarily idling production at Northshore."

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Cliffs said it will be able to ramp-up iron ore pellet production by bringing idled capacity back to operation once the unfairly traded steel problem subsides and domestic steel production reaches normal levels.

The first quarter of 2016 will see the temporary idling of Cliffs’s Northshore as well as United Taconite operations. The Hibbing Taconite in Minnesota and the Tilden and Empire mines in Michigan will continue to operate as usual.

Once the market conditions improve, the company plans to evaluate and adjust its production plans.

For 2015, Cliffs is maintaining its previous cash production cost per tonne expectations, and is lowering its cash production cost expectation to $50-55 per tonne for 2016.

The cash cost of goods sold expectation, which includes $9m per month of idle costs for the Northshore and United Taconite mines, will also be reduced to $60-$65 per tonne, the company said.