CLEVELAND — A biofuel plant near Marquette in the Upper Peninsula will be idled by its owner, Cleveland-based Cliffs Natural Resources Inc. (NYSE: CLF).

The company said its board had approved a plan to sell the plant. Cliffs said in a statement that “since initial production the plant has not performed to design capacity, nor at a production level that justifies continued operation.”

About 30 jobs will be lost. Cliffs said it would “make every effort to reassign these employees, where possible, to other positions within the company.”

Cliffs said the shutdown would result in a $30 million non-cash charge against its earnings in the current quarter.

The plant, Telkite Technology Park near Sawyer International Airport south of Marquette, was built to produce high-energy, low-emission biofuel cubes from sustainably collected wood and agricultural feed stocks.

David Blake, Cliffs’ senior vice president, North American Iron Ore and the Cliffs executive with operational responsibility for renewaFuel said, “Over recent years Cliffs executed a strategy focused on expanding its portfolio of steelmaking raw material assets. Cliffs continues to successfully grow its core iron mining business with a number of expansion projects underway. With this, it is essential that our management focus and allocation of capital resources be deployed where we can have the most impact for all stakeholders.”

Cliffs acquired renewaFuel in 2007 and previously operated a pilot plant in Battle Creek. Construction was completed on the Sawyer plant in early 2011 and the plant went through its commissioning phase during the first half of 2011. The plant delivered its first commercial supply of biofuel cubes to the Marquette Board of Light and Power in mid-July.
Cliffs noted that no public funds were used in construction or operation of the renewaFuel facility.

“While we believe the renewaFuel business model remains viable, the business is likely to have better prospects with a company more experienced in the area of biofuels that can develop renewaFuel to its full potential,” Blake said.

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