Reserve Mining Co-Owner Files Bankruptcy Petition

MORRISTOWN, N.J. (AP) _ Armco Inc. said Thursday its wholly owned subsidiary, First Taconite Co., has filed a Chapter 11 petition to place the Reserve Mining partnership in bankruptcy under the U.S. bankruptcy laws.

The petition was filed in U.S. Bankruptcy Court for the Southern District of New York, Armco said in a news release here.

First Taconite and a subsidiary of the Dallas-based LTV Corp., Republic- Reser ve Inc., each hold a 50-percent interest in the properties and assets of Reserve Mining, a Minnesota partnership which produces taconite iron pellets.

Last month, LTV and Republic-Reserve filed for reorganization under the U.S. Bankruptcy Code.

Armco said that, ″while the Reserve Mining Co. filing was regrettable, LTV’s decision to seek protection under Chapter 11 made this action unavoidable.″

″Without the benefit of two partners sharing fixed costs ... Reserve cannot economically continue to produce iron ore pellets and would not be able to meet its financial obligations,″ it said.

Reserve Mining was established in 1950 with a mine and pilot processing plant at Babbitt, Minn. In 1955, Reserve opened a large taconite processing plant at Silver Bay, 47 miles from Babbitt.

At the time of the LTV and Republic-Reserve bankruptcy filing, 480 Reserve employees were active with approximately 2,500 on layoff.

Reserve’s taconite mine in Babbitt, Minn., and its taconite plant in Silver Bay, Minn., have been on indefinite shutdown since LTV’s bankruptcy filing last month.

Minnesota Gov. Rudy Perpich announced the First Taconite filing at a meeting with steelworkers Thursday afternoon. He said he would meet with Armco officials next week.

Earlier in the day, Perpich said the state of Minnesota was putting together an $18 million incentive package to help reopen Reserve Mining.