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Magnetation May Start Operations This Summer

January 14, 2018

The iron ore mining operations at Magnetation could restart this summer, according to new owner Tom Clarke. The Grand Rapids, Minn., Plant No. 4 has been idle for more than a year and requires about $2 million to get equipment up to speed.

ERP Iron Ore purchased Magnetation out of bankruptcy a year ago, but start-up was delayed by Environmental Protection Agency violations. Before production can resume, the plant requires installation of pollution control equipment to bring it to permit standards. Clarke said he wasn’t aware of the extent of the problem when buying the plant—14 of 18 potential emission sites are in EPA violation. Clarke said that had he known, he would still have acquired the assets, “I just wouldn’t have paid as much.”

Ore concentrate from Grand Rapids will be shipped to the pellet plant in Reynolds, Ind., that is scheduled for $20 million in retrofitting. After processing, the pellets, designed for electric arc furnaces, will be sold to a new pig iron plant in Lorain, Ohio.

“I think we can have Grand Rapids up and producing concentrate late in the second quarter and shipping it down to Indiana. We have room to stockpile a lot down there, and then have Reynolds going by the third quarter to make pellets,” Clarke told the Duluth News Tribune this week.

In late December, Clarke, with Chippewa Capital Partners, completed the process of pulling Mesabi Metallics (the former Essar Steel Minnesota) out of Chapter 11 bankruptcy. Clarke hopes to blend operations at the facilities to provide iron ore for both blast furnaces and EAFs.

The deal for Mesabi has been complicated, however, by the purchase and lease of land within the Nashwauk project area by Cleveland Cliffs. In a lawsuit, Chippewa Capital has accused Cliffs of attempting to sabotage the Mesabi deal.

Chippewa is working towards completing the 7.0 million metric ton Metso pellet plant and the 2.0 million ton hot briquetted iron/pig iron plant at Mesabi. Clarke anticipates a 2020 production timeline for the facilities if the land leasing problems can be ironed out.

ERP managing director Rob Bigelow said the combined annual production of the facilities will be about 10 million tons. “This is going to be a very big deal. It just takes time to get there,” said Bigelow in the News Tribune.