| TOKYO (November 15, 2001) - Kobe Steel, Ltd. signed a memorandum of understanding
(MOU) yesterday with Mesabi Nugget, LLC on the construction and operation of a demonstration plant in northeastern Minnesota (USA) using its new proprietary ironmaking technology known as ITmk3 - a breakthrough process that turns iron ore into nearly pure iron. Following successful completion of a feasibility study, the final agreement is expected to be signed by the end of this year. Plans would then call for construction of a demonstration plant to begin at the taconite plant of the Northshore Mining Company at Silver Bay, Minnesota. (Northshore Mining is a wholly owned subsidiary of Cleveland-Cliffs Inc.) Successful operation of the demonstration plant will establish the commercial viability of the new process and allow for the start-up of a commercial-scale plant in 2005. Overall construction and operating costs for the demonstration plant are expected to amount to $22 million. Mesabi Nugget, LLC is seeking a loan from the Minnesota Minerals 21st Century Fund for a portion of the project funding. In addition to Kobe Steel, other participants in the Mesabi Nugget project are Cleveland-Cliffs Inc., Steel Dynamics, Inc., Ferrometrics, Inc. and the Minnesota state government. Kobe Steel and its subsidiary Midrex Technologies, Inc. began research on the ITmk3 Process in 1996. A pilot plant with a production capacity of 3,000 metric tons per year was built at Kobe Steel's Kakogawa Works. Test operations carried out between October 1999 and December 2000 successfully produced iron nuggets under continuous operation. The Mesabi Nugget project presents an opportunity for the ITmk3 Process to be demonstrated at a scaled-up level in anticipation of commercial operation. The Mesabi Nugget project is anticipated to provide an attractive mineral processing alternative for iron ore in northeastern Minnesota. The project would help promote development and employment in the state, while providing a value-added product for mining companies. For a relatively low investment, iron ore can be turned into iron nuggets on site and supplied directly to electric and blast furnace steelmakers as an alternative or supplement to pig iron.
Mesabi Nugget, LLC is the project owner for the Mesabi Nugget project. Cleveland-Cliffs, Steel Dynamics, Ferrometrics, the Minnesota state government, and Kobe Steel will provide funding or equity for the project. Cleveland-Cliffs Inc. is the leading supplier of high-quality iron ore products to the North American steel industry. Based in Cleveland, the company produced 20.3 million tons of iron ore products in 2000 from mines in Minnesota. Cleveland-Cliffs will provide the project site, materials and supplies for the project, and will undertake the operation of the plant. Participation in the Mesabi Nugget project will enable Cleveland-Cliffs to offer a value-added iron product. Steel Dynamics, Inc. is an electric steelmaker based in Fort Wayne, Indiana. In 2000, the company produced 2 million tons of steel. Steel Dynamics will offtake the iron nuggets. Ferrometrics, Inc. is a consulting company for reduced iron who originally founded Mesabi Nugget, LLC and has served as the coordinator and promoter of the project. The Minnesota state government's involvement in the project is through the Minnesota Department of Trade and Economic Development and the Iron Range Resources & Rehabilitation Agency (IRRR). The IRRR promotes economic development and diversification in northeastern Minnesota. The state is providing funding to the Mesabi Nugget project, as the project is anticipated to increase employment and contribute to the economic development of the region, in addition to its financial return.
Electric steelmaking experienced strong growth in the 1980s. The shortage of high quality scrap, the main raw material, in the 1990s led steelmakers to pay increasing attention to direct reduced iron (DRI) as a supplement to scrap. Strong demand has enabled the MIDREX Direct Reduction Process to be the leading technology for DRI. About 68% of all DRI produced worldwide is made using this process, which uses natural gas to reduce iron ore. Kobe Steel and Midrex Technologies, Inc. saw the need for a direct reduction process using coal as the reductant. They subsequently developed the FASTMET Direct Reduction Process that uses iron ore fines and pulverized coal. Furthermore, a breakthrough technology called ITmk3 was developed to produce an iron substitute for pig iron.
ITmk3 (pronounced "I-T Mark Three") is a new technology that provides a flexible and environmentally friendly process for producing a high purity iron product. In this process, iron ore fines and pulverized coal are formed into solid "green" pellets. These pellets are fed into a rotary hearth furnace and heated to 1,300-1,450 degrees C. At this temperature range, the pellets are reduced and melted, enabling the iron to cleanly separate from the slag. The ironmaking process takes only about 10 minutes. The resulting product is in nugget form, which can be continuously fed to melting furnaces.
* High quality iron nuggets can be produced in a one-stage process. As coke ovens and sintering plants are unnecessary, capital investment costs are low. * The process takes place at a relatively low temperature of 1,300-1,450 degrees C. Reduction, melting and slag removal takes about 10 minutes. Energy efficient and environmentally friendly, the ITmk3 Process produces 20% less carbon dioxide than blast furnace operations. * As no FeO remains when the pellet melts, refractory erosion in the rotary hearth furnace is prevented. This reduces costs and promotes stable furnace operation. * Iron nuggets are easy to transport. For steelmakers, easy melting and high yields reduce energy consumption. Carbon content can also be adjusted. * The process is applicable to a wide variety of iron ore and coal.
Gary I. Tsuchida
@
|
