Upgrades at Northshore Mining in Silver Bay were finished ahead of schedule, and the Iron Range plant has begun producing a higher grade of iron-ore pellet.

Originally, the $100 million in improvements that made Northshore the first U.S. plant to produce "DR-grade" pellets were to be completed next month. Owner Cleveland-Cliffs noted in its earnings announcement on Friday that Northshore was able to transfer 40,000 tons of the pellets in the company's second quarter to be used as raw feedstock for the company's hot briquetted production plant being built in Toledo, Ohio.

The Cleveland-based company also noted that its special DR-grade pellets may one day be used to supply separate DRI facilities, which use more-advanced "electric arc furnaces" to convert iron ore and scrap metal into steel.

Company spokeswoman Patricia Persico said some pellets also have been sold to an outside company "as a smaller volume."

"Now we will have the capability to produce more volume and sell commercially if we have the demand," she said.

While Northshore Mining added a new DR-grade production line, it will continue to produce its traditional taconite-pellet products at the same time. Taconite is fed into traditional blast furnaces.

Northshore Mining will host a celebration ceremony to honor the plant upgrade on Aug. 6 in Silver Bay.

Cleveland-Cliffs also operates Hibbing Taconite and United Taconite on the Iron Range, and its Tilden Mine in Michigan. Its Toledo plant currently being built should be completed and operational next year, officials said.

Last week, Cleveland reported second-quarter revenue for all operations rose 4% to $743 million, or a record 6.2 million long tons of iron. Sales reflected a six-year high in average pellet prices.

Earnings from continuing operations, however, still fell 3% to $161 million, or 57 cents per share. Earnings included a one-time $18 million charge associated with the elimination of debt.