Cleveland-Cliffs is maintaining plans to temporarily shut down its Northshore Mining operations in Babbitt and Silver Bay on May 1.

Cliffs, Minnesota's largest iron ore operator, said in February it would idle the facilities this spring amid a royalty dispute and changing operational strategies. Together, the operations employ 500 people.

During an earnings conference call Friday, Cliffs CEO Lourenco Goncalves said the company has "space capacity."

"We are treating Northshore in Minnesota as our swing producer," he said. "We are not planning to run Northshore at this time because we feel that that would not be the right thing to do."

Northshore's mine in Babbitt and the taconite processing plant in Silver Bay are expected to be closed for at least four months. The shutdown will be a significant economic blow to both Silver Bay and the Iron Range.

Cleveland-based Cliffs is in a long-running dispute with Mesabi Trust, a publicly traded company that gets all of its revenue from royalties paid by Cliffs for ore mined in Babbitt. Goncalves has called the royalty payments "absurdly high."

In 2019, Cliffs spent $100 million upgrading Northshore's operations to produce a better grade of iron for steelmaking. But that supply is now being sourced from the Minorca mine near Virginia, Minn., which Cliffs has owned since buying ArcelorMittal USA in late 2020.

Through acquisitions over the past couple of years, Cliffs — which also owns two other Iron Range taconite operations — has transformed itself into a full-fledged integrated steelmaker.

The company is shifting away from selling iron ore to other steel companies. It also acquired a scrap-steel firm last fall, which can supply its steelmaking operations in place of some iron ore.

Cliffs reported strong first quarter earnings Friday. It posted net profits of $801 million, or $1.50 a share, up from $41 million or 7 cents a share a year earlier. Analysts were forecasting per-share earnings of $1.40.

Cliffs' stock closed Friday at $28.95, down 63 cents on a down day for the market. The company's stock rose from about $19 in February, before the Russian invasion of Ukraine, to as high as $32.71 in late March.

Ukraine and Russia are major iron and steel producers, and the war has constricted global supplies of both.