Cliffs moves questioned

To the Journal editor:

Cleveland Cliffs Iron Co. and its CEO, Lourenco Goncalves, have been prominent in the news lately with their unsuccessful bid to purchase US Steel, Inc. CCI, or Cliffs, as the historic mining company is called by so many here in Michigan’s Upper Peninsula, has played a huge role in the extraction and refining of iron ore and consequently the employment of significant numbers of Upper Peninsula men and women.

For Cliffs, that long mining history reaches back to the 1920s when it first leased the Empire Mine in Richmond Township here in Marquette County. Allan Koski’s excellent book, Empire Mine, Cascade Range, chronicles the epic development of the Empire, Michigan’s largest iron mine. The book also details the support that Cliffs provided to Richmond Township and Marquette County in conjunction with its operations at the Empire Mine up until and even past its declared end of mining there in 2016.

However, that support of Richmond Township, in a particular dramatically ceased in 2016 and right up to the present as Cliffs decided to stop payment of taxes to Richmond Township under Michigan’s specific ore tax. That state statute was drafted and enacted solely for the empire Mine’s operations in 1951, Public Act. No. 77 of 1951, subsequently amended.

For 7 years now, Cliffs has taken the controversial position that it has no obligation to pay the specific ore tax because it has not ceased mining operations at the Empire, rather it has “idled” such mining operations. The terms of the specific ore tax statute do not include the term, “idled.” Even so, Cliffs has in fact continued to mine iron ore from locations within the boundaries of the Empire Mine.

For decades, Cliffs has paid specific ore tax to Richmond Township, and to a lesser degree, surrounding municipalities based on the preceding average of iron ore pellets sold over the 5 years leading up to the year the tax was due. After paying the specific ore tax calculated for 2016, Cliffs protested further payment beginning in 2017, contending that their mining operations were idled. Recently, specific ore tax payments for the year 2021 were paid by Cliffs, however, because they had neglected to protest those payments as required by law.

As a result of their decision, Richmond Township’s revenues have effectively been cut in half, leading to the end of the previously free garbage collection for Richmond Township residents, the end of previously free Richmond Township library services, the end of Richmond Township localized police coverage by the County Sheriff’s office and the reduction of Richmond Township employees for outdoor services from 3 to 1. The township has had to sell its garbage truck and ambulance and does not have the means to replace its aging fire engine as it becomes effectively obsolete.

After having removed gargantuan amounts of iron ore from Richmond Township, world class Cleveland Cliffs Iron Co. has abruptly dropped Richmond Township by refusing to pay specific ore tax under the curious contention that it has simply idled its Empire Mine operations. Even as it announces plans to expand its iron ore mining operations at the contiguous Tilden Mine where the body of iron ore in neighboring Tilden Township remains undepleted, one can’t help but wonder if Cliffs will drop Tilden Township too, once the ore is removed.


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