Iron ore concentrate and pellet producer Magnetation has announced plans to close its Plant 1 iron ore concentrate facility in Keewatin, Minnesota, US, citing low global iron ore prices.

The plant, which will be indefinitely idled by the end of March, would be placed on a care and maintenance programme. Its closure is expected to improve the company’s cost competitiveness.

According to Magnetation, over the past 18 months, global iron ore prices have declined by more than 50%.

"We believe it is in our best interest to indefinitely idle our highest cost operation."

Magnetation CEO Larry Lehtinen said: "Due to the unprecedented collapse in iron ore prices over the past year and the iron ore market uncertainty moving forward, we believe it is in our best interest to indefinitely idle our highest cost operation.

"There is no way to know how long global iron ore prices will remain at the present depressed levels and consequently we are unsure of the duration of this idling."

With plans to place some of the affected workers and staff in other areas, the company will support its workforce by liaising with appropriate governmental agencies.

Plant 1 is Magnetation’s smallest and highest cost operation. It was expected to produce 350,000t of iron ore concentrate this year.

Iron ore previously produced by Plant 1 will be replaced by increased production at the company’s other operations, as well as outside purchases.

Magnetation also owns and operates Plant 2 and Plant 4 in Minnesota.