Sep. 12--Cliffs Natural Resources, the parent company to United Taconite on the Iron Range, said Friday it expects to produce more iron ore this year than earlier projected.

In another indication that the economy is starting to strengthen, the company said it expects to sell about 16 million long tons of iron ore in 2009, an increase from previous expectations of 13 million to 14 million tons, according to a company news release Friday. Production is slated to rise to 17 million tons, up from previous estimates of 15 million tons.

"As our customers are increasing steel production and restarting blast furnaces in North America and Europe, we are seeing modest improvements in orders and in market expectations for steelmaking raw materials," said Donald J. Gallagher, president of Cliff's North American business unit, in a prepared statement. "We will continue to monitor the markets closely to ensure we adjust production appropriately to meet demand as needed."

Cliffs' production increases announcement comes a week after United Taconite said it would ramp up production. The subsidiary of Cliffs Natural Resources said a gradual increase in production would occur at three locations at the Iron Range. For about 400 hourly workers, that means a return to a 40-hour workweek through this year.

"Mining is one of the biggest economic drivers in Northeastern Minnesota, so any sliver of hope would be good for jobs," Sen. Amy Klobuchar said.

"I don't think we've turned this thing around overnight, but we consider an increase in production a good sign we are seeing economic recovery."

Steel industry analyst Chuck Bradford said operation rates across the industry have increased from 40 percent a few months ago to the mid-50s now -- and the trend will continue to swing upward.

"There will definitely be increasing operating rates in the steel industry in the coming weeks," he said.

Bradford, however, cautioned that more production is meant to restock inventories, not meet substantial increases in demand.

"I'm looking at their customers and they are reopening operations," he said, using ArcelorMittal as an example. "There are no signs of the overall economy recovering, but there are signs in inventory. That is positive because that is the first sign of how an economy recovers."

Bradford pointed to the temporary boost from the federal rebate program Cash for Clunkers as a reason for increased steel production to restock inventories.

"They aren't selling more, just working off inventory," he said, "but that helps because there is a lot of steel in cars."

Cliff's North American operations include six iron ore mines in Minnesota, Michigan and eastern Canada.

"[Cliffs] must make sure they build big inventories before the lakes freeze," Bradford said.

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