MEsaBi NuggEt: - Steel Dynamics, Inc.

DECEMBER 2009 • VOL. 98 NO. 12
Mesabi Nugget:
A Steady Presence for the Range
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Mesabi Nugget:
A Steady Presence for the Range
Construction at the Mesabi Nugget project
near the site of former taconite operations of
LTV Steel Mining Co. near Hoyt Lakes, Minnesota,
is virtually complete. Commissioning of
numerous aspects of the many-faceted operation
already has begun.
The $260 million project, run by Steel Dynamics,
Fort Wayne, Indiana, features the patented
ITmk3 ironmaking process developed
by Japanese steel giant, Kobe Steel Ltd. The
new plant will employ a rotary hearth furnace
to turn iron ore and pulverized coal into iron
nuggets of similar quality to blast furnace pig
iron. Although the ITmk3 process has been
tested extensively in pilot plants, this will be
the world’s first commercial iron nugget plant.
The U.S. Department of Energy’s fact sheet
on the process says that the technology will be
able to complete reduction, melting and slag
removal in only about 10 minutes. The ITmk3
process is elegantly simple, it says, with a onestep
furnace operation that requires less energy,
capital, and operating cost than existing
pig iron technology.
“A lot has been done already,” said David
Bednarz, vice president of iron resources with
Steel Dynamics. In preparation for startup, coal
is arriving from Hallett Dock in Duluth; the repulping
facility is being commissioned, slurry
is being processed then filtered and dried into
green balls. Coal and limestone grinding is tak-
ing place, as well. The raw materials are being
metered/mixed and then turned into green
balls, which are subsequently dried.
Commissioning of the rotary hearth furnace
equipment is also underway, Bednarz said. Refractory
work on the rotary hearth furnace has
begun and production should begin by the end
of the year. The furnace, the world’s largest rotary
hearth furnace, is 60 meters in diameter—
about two-thirds the length of a football field.
The finished iron nuggets, similar to pig iron
in iron content but somewhat lower in carbon,
will be 96% iron, with the rest carbon and silicon.
Bednarz said specific chemistry has not
been decided.
He said that the advantage of nuggets over
pig iron is they can be continuously charged,
and the nugget size facilitates more efficient
melting.
The nuggets will go to Steel Dynamics’ Butler,
Indiana, mini-mills via rail in 10- to 20-car
blocks. The will be hauled by Canadian National
to Chicago, then by Norfork Southern on to
Butler. Steel Dynamics also is looking into the
feasibility of shipping by water.
Initially, Mesabi Nugget will use taconite
concentrate from Northshore Mining in Silver
Bay, and hematite concentrate from Magnetation
Inc., which is reclaiming natural ore
mine tailings basins near Keewatin on the
Mesabi Range. The company has been stockpiling
concentrate so it can be ready when
the plant is ready to ramp up production.
Mesabi Nugget eventually will mine its own
taconite from an adjacent orebody, but work
is not complete on an environmental impact
statement. Environmental review has been
slow, but they expect it to be completed in
the fourth quarter of 2010. After the mine
is operational, Mesabi Nugget intends to get
its taconite exclusively from its own orebody.
Construction began in 2007 and has continued
through the recent downturn. The startup date
originally planned for the third quarter of this
year was pushed back to late 2009 because of
the lower demand for iron in the short term.
“We can shove back the capex on that and take
operational losses,” said Keith Busse, chairman
and CEO of Steel Dynamics. “Given our inventory
position and the economy, there is no rush
to get there,” he was quoted by American Metal
Market (AMM) in April of this year.
Although the project has had some roadblocks,
it has chugged along regardless of the
bad economy and has provided construction
jobs on the Mesabi Range at a crucial time
when many workers were hit hard by cutbacks
at the mines. Industry observer, Peter Kakela, a
professor at Michigan State University, told the
Duluth News Tribune that he viewed the continued
work as a sign of the project’s strength.
This past summer, when there were more than
4 SKILLINGS MINING REVIEW ı DECEMBER 2009

800 contractors on the job, the hours were long
and the work was demanding. Bednarz put it
this way: “There was heartache and frustration
balanced by moments of brilliance.” His praise
for and pride in the Mesabi Nugget workforce
was abundant. He added that there is huge excitement
about the project as it moves into its
final ramping up stages.
A one-step furnace operation that eliminates
the need for a taconite plant, blast furnace,
and coke ovens, Mesabi Nugget claims to
be environmentally superior to conventional
iron making because it can reduce energy consumption
by 30% and carbon dioxide emissions
by 21%. Also, because the nuggets will be
96% iron, compared with the 66% iron taconite
pellets, it reduces the amount of material to
be transported to the steel plants, resulting in
a high-quality, higher value iron product at a
substantially lower cost.
The nuggets will be fed into electric arc furnaces,
producing flat-rolled steel at Steel Dynamics’
Butler, Indiana, plant, replacing a portion
of the scrap and imported pig iron.
One industry observer noted that scrap has
been the traditional material for electric arc
furnaces and that the relatively high cost of
scrap makes the Mesabi Nugget project viable.
At full capacity, the plant will produce 500,000
metric tons of iron nuggets annually and will
have a permanent workforce of about 70.
Mesabi Nugget was designed to eventually tri-
IRON
OXIDE
MIXER
REDUCTANT
(COAL)
SCREEN
IRON
NUGGET
PELLETIZER
SLAG
DRYER
ple in size if that kind of demand develops. The
site is designed to accommodate this. Bednarz
told Skillings that such an increase in size will
depend on future cost structure and volume.
He said the first year will tell a lot about what
direction the project will take.
According to a University of Minnesota-
Duluth Bureau of Business and Economic
Research study, the plant’s economic impact
on Minnesota’s mining industry could nearly
SCHEMATIC OF THE ITMK 3 PROCESS
AIR
HEAT
RECOVERY
SYSTEM
ROTARY HEARTH
FURNACE
DUST
COLLECTOR
BURNER FUEL
FLUE GAS
MELTING
REDUCING SEPARATING QUENCHING CRUSHING
SLAG
REMOVING SLAG
IRON
NUGGETS
triple by 2013, a September Range Readiness
Initiative article said.
For Minnesota, the project opens up possibilities
for taconite mines, which traditionally
have sold their pellets to integrated steelmakers,
to feed blast furnaces.
Bednarz said, “It’s a pretty doggone exciting
project.” He noted the project could be one of
those major changes in modern industry.
MESABI NUGGET
PLANT AREA
PROPOSED TAILINGS
DISPOSAL AREA
AREA 1 PIT
AREA 2WX IN-PIT STOCKPILE
CRUSHER AREA
AREA 6NW PIT
AREA 2WX PIT
AREA 6 OVERBURDEN STOCKPILE
AREA 6SW PIT
AREA 6 PIT
AREA 6 IN-PIT
SOUTH STOCKIPILE
AREA 2WX STOCKPILE
AURORA
POP. 1,350
HOYT LAKES
POP. 2,082
DECEMBER 2009 ı SKILLINGS MINING REVIEW 5