Cleveland-Cliffs' new $100 million plant on the Iron Range will be the first in the country to use an improved technology that produces a special type of higher-quality iron-ore pellet.
The Silver Bay, Minn., plant, part of Cliffs' Northshore Mining operation, will begin producing "direct reduced" iron (DRI) pellets when the plant opens in August. The pellets are a special type of low-silica iron-ore pellet that are more valuable than the traditional taconite or blast-furnace iron pellets now produced in the U.S., the company said Friday.
Cliffs' upgrade is important, state officials said, noting that DRI pellets can be used in the more desirable "electric arc" or "minimill" furnaces that convert iron into steel. The traditional taconite iron pellets now made across Minnesota's Iron Range can only be used in old-fashioned blast furnaces, not in the efficient minimills.
Yet electric arc furnaces are growing in popularity. The state of Minnesota estimates that about 67% of the world's steel is now made by feeding scrap steel and DRI into electric arc furnaces. So the DRI pellets are badly needed in the United States. Right now, they are largely imported into the U.S., said officials with the Iron Range Resources and Rehabilitation Board.
Cliffs' expansion efforts in Silver Bay are the latest of several growth actions in recent years, following a major restructuring that had the once-ailing Cliffs selling off coal plants and other assets worldwide. Besides Northshore Mining, Cliffs also operates Hibbing Taconite and United Taconite on the Iron Range.
Northshore has an iron-ore mine in Babbitt, Minn., and a traditional ore-pelletizing plant in Silver Bay.
To expand into DRI production in Silver Bay, the Ohio-based Cliffs upgraded its concentrator building, built a new scavenger building and invested in new conveyor systems, a limestone tank and a steam-generating plant. All will support the large-scale commercial production of the DR-grade pellets, the company said.
The DRI pellets will be sent to Cliffs' $830 million hot-briquetted iron plant in Toledo — which is still being completed — and a new, unnamed customer outside the United States, the company said.
In 2017, Cliffs expanded operations at United Taconite in Forbes, Minn., by building a $75 million Mustang "superflux" pellet plant.
The first DRI plant in the state was originally set for the former Essar Steel Minnesota site in Nashwauk. After Essar Steel went bankrupt in 2016, an investment group bought the operation, and successor company Mesabi Metallics has pledged to finish the controversial project but has missed some early deadlines. Essar Steel Minnesota's parent company, Essar Global, also is back in the picture after buying Mesabi's debt.
Cliffs had expressed interest in buying the Nashwauk site after the bankruptcy. The company in December 2017 did pick up ownership and leases on 3,768 acres of land near the site after Mesabi missed a financing deadline. Cliffs is in litigation with Mesabi over issues such as trespassing and mining permits.
Cliffs CEO Lourenco Goncalves said he wants Cliffs to win the state's mining permits in Nashwauk, so Cliffs can build its own DRI plant on the former Essar Steel site. But Goncalves also said he would not wait forever for the issues in Nashwauk to be resolved.
Dee DePass • 612-673-7725
