|Saturday, November 22, 2014||Search Our Site|
Comment on This Story / Send This Article to a Friend
Business North - The Daily Briefing - Business Newspaper Online
Cliffs will make DR pellets, but not in near future
PHOTO: P. Kelly Tompkins
Cliffs Natural Resources on Wednesday confirmed its desire to manufacture direct reduced (DR) iron on the Iron Range – a development that could spark an investment ranging up to $300 million per site.
Cliffs, which has a stake in three Minnesota mines, has developed workable technology, a key executive said at the corporation’s annual Iron Range briefing.
“We have had very positive results from initial technical feasibility analysis. That’s a key part,” said P. Kelly Tompkins, executive vice president for legal, government affairs and sustainability.
Now, the company is analyzing capital investment requirements and market demand for the new product, which contains a higher portion of iron than taconite.
“Ideally, that demand will be geographically situated … in an area where it would geographically make sense in terms of transportation costs,” he said, preferably in the Great Lakes region. Cliffs also is studying the costs involved with securing permits for a DR plant.
“We could be looking at a million or a million-and-a half (tons) from United Taconite or Northshore Mining Co.,” Tompkins said, although development costs would be lower at the Silver Bay plant and somewhat less than $300 million. ”Realistically, I think we’re looking at a two- or three-year time frame to really be out there with products. Hopefully, this represents a new growth market for our company.”
The content of a DR pellet contains less silica than a taconite pellet and can be used in electric arc furnaces that are smaller than blast furnaces. Electric arc steel mills consume less energy and have a smaller environmental footprint, explained Tompkins, who also is Cliffs’ chief legal officer and president of China operations.
In the long term, both United Taconite and Northshore could manufacture DR pellets, he said, but market demand will determine the timing.
“We think we’re well positioned for this DR opportunity. It’s very much on our planning radar. We’re going to continue moving this along, but that doesn’t mean it’s going to happen three months from now,” Tompkins said.
Previous Daily Briefing Articles:
BusinessNorth - The business news source for Northeastern Minnesota and Northwestern Wisconsin.|
P.O. Box 16223, Duluth, MN 55816
Phone: 218-720-3060 Fax: 218-720-3068 email@example.com