Iron-Ore Co. with Cargill Tie Inks Power Deal
A relatively new mining company with a patent-pending technology to produce iron concentrate from previously mined ore just signed a deal with Minnesota Power to provide electricity at its planned plant in northern Minnesota.
Nashwauk-based Magnetation has started road construction and other preparatory work for its planned facility near Taconite, which it intends to open in May.
Duluth-based Minnesota Power on Tuesday announced an agreement to provide power to Magnetation, and it expects a peak electric demand from the company of about 5 megawatts. (To add some perspective, one megawatt of energy generates enough power for about 500 homes.)
Wayzata-based Cargill, Inc., the largest privately held company in Minnesota, in January announced that it had entered a joint venture with Magnetation, granting it the exclusive right to jointly develop and apply the company's mining technology and market the recovered iron concentrate to its international iron ore customers.
Magnetation aims to produce 500,000 metric tons of iron concentrate at its new plant in 2012 and 800,000 tons each year thereafter. The company began producing iron concentrate from a facility in Keewatin in early 2009.
The state's taconite industry grew in 2010 as production doubled and climbed back to near pre-recession levels. Bob Wagstrom, engineering specialist from the Minnesota Department of Revenue, told Twin Cities Business in January that he projects that 2011 production levels will reach about 38 million to 39 million tons-similar to the quantities produced between 2004 and 2008-due in part to Magnetation's plants.
Minnesota Power provides retail electric service in northeastern Minnesota to 144,000 customers and to 16 municipalities. In other news, Allete, Inc., Minnesota Power's parent company, announced in late July the launch of a new wholly owned subsidiary, Allete Clean Energy.