Mesabi Nugget plant comes back to life
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There was bitter disappointment on the Iron Range last fall when Cleveland Cliffs Corp. announced the Mesabi Nugget project was not going to happen.
Mesabi Nugget was expected to create more than 100 full-time jobs near Hoyt Lakes -- a region that lost more than 1,400 jobs when LTV Steel closed its taconite plant and mine there six years ago.
But Mesabi Nugget was about more than jobs, according to Sandy Layman, who heads the regional state development agency Iron Range Resources.
"Mesabi Nugget represents sort of the third technology. First we had iron ore. Then Minnesota produced taconite. And now we have the potential to produce iron nuggets," said Layman.
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Iron nuggets are produced from the same taconite concentrate used to make taconite pellets. The difference is, taconite pellets are about 65 percent iron, while the nuggets are almost pure iron.
Taconite pellets can only be used in steel blast furnaces. But, Layman says, the newest steel mills use a different technology.
"Iron nuggets feed electric arc furnaces. Taconite pellets are not able to feed electric arc furnaces. So it opens up a whole new marketplace for northeast Minnesota, and represents the newest technology," said Layman.
For five years, there was a wind behind the Mesabi Nugget project. A pilot project proved the technology feasible. The Legislature fast-tracked environmental permitting to ensure the project would land in Minnesota.
The permits were approved and cleared for. Mesabi Nugget is cleared and available to begin construction immediately.
But in November, all looked lost, and the clock was ticking. Mesabi Nugget's environmental permits were in danger of expiring. Construction had to be underway by this coming Monday, Jan. 29.
Then, on Tuesday came news that one of the project partners, Indiana-based Steel Dynamics Inc., is considering taking the project's lead. Steel Dynamics CEO Keith Busse confirmed his company's interest in guarded comments during a quarterly earnings conference call.
"We are looking at opportunities to resurrect that project, with the eye on going it alone, if you will -- making it an all-SDI project," said Busse. "We're still very, very high about the technology, and, as I said, looking at opportunities to push that project forward in the year '07 as well."
Wednesday, Mesabi Nugget closed a deal to buy more than 4,000 acres at the Hoyt Lakes site.
But the most important step came Thursday in St. Paul. Larry Lehtinen, president and founder of Mesabi Nugget, says project representatives convinced state pollution officials they were ready to proceed.
"The permits were approved and cleared for. Mesabi Nugget is cleared and available to begin construction immediately," said Lehtinen.
Lehtinen says contractors will be on the site Friday, and some concrete will be poured by Monday. However, the full construction schedule has not yet been set. Decisions are pending on the structure of Mesabi Nugget's reworked partnership.
"Although there's still more work to do on that, the concept that we've been working with is for Steel Dynamics to take the primary role over in the project," said Lehtinen.
Steel Dynamics has to take the new plan to their board, which may be several weeks down the road. Until that's settled, Lehtinen says, there's no firm construction schedule and no projected date when the Mesabi Nugget plant will actually begin production.
