Magnetation to Build 2 Iron Ore Recovery Plants on Iron Range
Magnetation, LLC, will reportedly build two iron ore recovery plants on Minnesota’s Iron Range—a move that’s expected to create 240 jobs.
According to the Star Tribune, the Grand Rapids-based company, which already reclaims iron ore from mining waste at plants in Keewatin and Taconite in northern Minnesota, said that the new plants will be located in Itasca County—one northwest of Coleraine and the other southeast of Calumet.
Magnetation will invest an estimated $120 million in the new plants, each of which will reportedly employ about 120 workers.
The company also announced Tuesday that it will build a new iron ore pellet plant in Reynolds, Indiana. The city beat out Superior, Wisconsin, which was also under consideration as a location for the new plant.
Magnetation said that the Indiana plant will require a capital investment of between $300 million and $350 million, and it anticipates breaking ground during the first quarter of next year.
“With convenient access to major railways and highways, Reynolds is an outstanding location for the company’s new pellet plant,” Magnetation CEO Larry Lehtinen said in a prepared statement. “We thank our local and state officials in Indiana for their ongoing support of our company, and we look forward to joining the Reynolds community in the very near future.”
Some of the iron ore concentrate from Minnesota’s two new recovery plants will reportedly be transported to the Indiana site to be transformed into iron ore pellets.
The Indiana plant is expected to become operational in late 2014 or early 2015 and employ roughly 100 to 120 people. The iron ore pellets that the plant will produce are a critical raw material used in the steelmaking process.
Minnesota was once a possible site for the plant, and state lawmakers passed a bill enacting a pilot program to streamline the permitting process for Magnetation after the company expressed concern about meeting a critical deadline under Minnesota’s environmental permitting laws. (The company expects the price of iron ore to substantially decrease by 2015, so it needed its new plant to be operational by 2014.)
But Magnetation said in June that it would build the new plant in either Wisconsin or Indiana. Lehtinen recently told the Star Tribune that Indiana had the space and numerous rail lines required to make and carry pellets to AK Steel’s plants and furnaces in Ohio and Kentucky, whereas Minnesota and Wisconsin didn’t have comparable rail access for a plant that will produce 3 million metric tons of iron ore annually.
Magnetation’s announcements about its new plants come at a time when prices for steel and iron ore are on the decline. In fact, Cleveland-based Cliffs Natural Resources, Inc., said last week that it would idle two of the four taconite production lines at its Northshore Mining subsidiary, which operates a mine near the northeastern Minnesota town of Babbitt and a production facility near Silver Bay—a move that will result in about 125 layoffs. The moves, it said, were meant to “align with expected sales volumes” and driven by “increased iron ore pricing volatility and lower North American steelmaking utilization rates.”
Lehtinen told the Star Tribune that he’s not worried about global turmoil in the steel industry. He expects pricing could dip from the current $118 a ton to $90 a ton in the next year and a half, but he doesn’t think it will stay below $100 for long.