Star Tribune reported that Minnesota iron ore production rose slightly in 2012, a third consecutive annual increase and another sign of the industry's recovery from a recession induced downturn.
According to state data, taconite output climbed to 39.2 million tonne, up 0.8% from 2011. The state Revenue Department's 2012 figure is based on 11 months of production and the estimated output for December.
Yet the iron mining industry faces challenges in 2013, even though world prices for iron ore have rallied in recent weeks. The department forecast a nearly 5% drop in production next year.
Mr Craig Pagel president of the Minnesota Iron Mining Association, a trade group based in Duluth said that "We have to get past all of the talk of the fiscal cliff and see a recovery continuing in the economy. That will only strengthen the iron ore industry in Minnesota."
The Minnesota Revenue Department, which tracks Minnesota iron ore output to collect production taxes, forecast a drop in output to 37.3 million tonne next year.
Mr Bob Wagstrom, an Eveleth based engineering specialist who works on the department's taconite figures, said that the 2013 projection is based largely on Cliffs Natural Resources' recently announced cut in production at its Babbitt mine and Silver Bay taconite processing plant. The cutback, which takes effect next week, will result in the layoff of 125 workers.
Ms Sandra Karnowski a company spokeswoman said that cliffs' operations in Minnesota and Michigan mainly serve US customers. They have opted for fewer pellets than they have in past years.
The recent rally in iron ore prices comes after hitting a three year low in September. The rally is driven partly by a resurgence of demand in China, where a benchmark price is up 56% since the slump.
