Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

Cleveland-Cliffs has idled the AK Coal Resources North Fork mine in Friedens, Pennsylvania due to weaker demand for steel from clients due to the COVID-19 pandemic. 


Lower demand, particularly by those in the automotive industry, has dramatically reduced the internal need for coal production. The site will lay off approximately 115 employees. 


AK Coal Resources produces met coal, which is a necessary fuel and chemical reducing agent in molten iron production in a blast furnace. AK Steel operates blast furnaces (BFs) in Middleton, Ohio and Dearborn, Michigan. The reduced demand in North America translates to reduced capacity utilization at BFs and, therefore, a reduced internal need for metallurgical coal.


According to a statement by Patricia Perisco, director of corporate communications, Cleveland-Cliffs, the coal leadership team will maintain the assets and ensure environmental compliance with state and federal regulations. Cleveland-Cliffs is keeping all options open including the potential sale of the asset, which will be evaluated during AK Coal’s indefinite idled period.


The North Fork mine in Somerset was first idled on March 19 in response to the state government’s COVID-19 policies and remained closed despite a change in statute the next day that excluded coal mining operations from the shutdown policy.


For the moment, another AK Steel facility in Butler County, Pennsylvania continues normal operations as it specializes in steel for electrical transformers not automotive components.


In October of 2011, AK Steel acquired Solar Fuel Co. for $36mn with significant metallurgical (met) coal interests in Somerset County, Pennsylvania that was named AK Coal Resources. Cleveland-Cliffs acquired AK Steel in a merger that was completed March 13, 2020.


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