Field Notes: A Really Big Nugget
Mesabi Nugget is churning out nuggets of nearly pure iron from its demonstration plant at Northshore Mining in Silver Bay. Eventually, said Mesabi Nugget LLC president Larry Lehtinen, the novel iron-making process could add a valuable product-and jobs-to Minnesota's Iron Range.
"If it works-if you want to think in grandiose terms-it offers Minnesota and the Iron Range the opportunity to become one of the major exporting districts of pig iron," said Lehtinen. "It could become a $1 billion export activity for the state of Minnesota, and that could be 1,500 direct jobs."
"It looks real promising," said William Brice, director of DNR Division of Lands and Minerals. "We obviously have to run it [the demonstration] a little longer. It would augment our main business of taconite pellets pretty nicely."
Lehtinen, a Range native and one-time manager of the Minorca iron mine in Virginia, Minn., is keenly aware that once iron leaves the Range, its economic contribution to the state diminishes. Since the late 1980s, he has worked to develop a method of economically "reducing" ore or taconite pellets to more valuable pure iron. He visited a small pilot plant operated by Kobe Steel Ltd. in Japan. The plant heated ore to produce iron nuggets in a process known as ITmk3 (I-T mark three).
"I was pretty excited about it," Lehtinen said. "I thought this would make a lot of sense in Minnesota."
He formed Mesabi Nugget and raised money for a $30 million, 25,000-tons-per-year demonstration plant. Besides Cleveland-Cliffs Inc. (which owns Northshore Mining), other partners included Steel Dynamics Inc. and Kobe Steel. Funding came through two state agencies. The Iron Range Resources and Rehabilitation Board approved an $8 million loan from the state. Minnesota Minerals 21st Century Fund, administered by the Department of Employment and Economic Development, loaned another $8 million. The U.S. Department of Energy has contributed about $2 million so far.
Last summer the plant produced 1,000 tons of 96 percent pure iron nuggets from taconite concentrate (about two-thirds iron).
The "second campaign" this fall will generate several thousand tons. If all goes well, "we could be starting up a 320,000-tons-per-year prototype module by the middle of 2005 and a full-size commercial plant in 2007," Lehtinen said.
Iron nuggets wouldn't replace taconite pellets, which feed the blast furnaces of the nation's large integrated steel mills. Instead, the nuggets would supply so-called mini-mills, a growing sector of the steel industry. They can also be used by foundries and some integrated steel mills.
The nuggets would be a more valuable product made from Minnesota iron. While taconite pellets sell for about $35 a ton, iron nuggets stand to sell for about $200 a ton.
One purpose of the project is to gather information about environmental impacts of producing iron. The ITmk3 process produces about a third less carbon dioxide, and less nitrogen oxides, sulfur dioxide, and particulates than blast furnaces, according to Midrex Technologies, an affiliate of Kobe Steel. Lehtinen is convinced the process will prove feasible and economical. "If we had a commercial nugget plant here today, we would be competitive to ship material anywhere in the world, including China."