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Trump to host mining, trade policy roundtable in Duluth

Cliffs ready to break ground on iron plant

Clouds of steam rising from the Northshore Mining Company in Silver Bay. (News Tribune file photo)

Cleveland-Cliffs is ready to break ground on its long-promised hot-briquetted iron plant in Toledo, Ohio that will help boost production at Northshore Mining in Silver Bay.

Northshore will produce the HBI-ready taconite pellets used at the $700 million Toledo plant

that's predicted to produce 1.6 million metric tons per year of HBI to be used in electric-arc steel mills.

It's one of the first major inroads into the electric steel-mill market for Minnesota taconite which has generally gone to larger blast-furnace steel mills. Because electric mills now produce nearly two-thirds of all domestic steel, that market is seen as critical for the long-term health of Minnesota's taconite ore industry.

Currently most of the iron for those electric-arc steel mills, which is mixed with recycled scrap steel, is imported into the U.S. as pig iron from Ukraine, Brazil, Russia and Venezuela, Cliffs officials noted. It's the same iron market that Mesabi Metallics hopes to break into with a pig-iron plant planned for Nashwauk at the site of the former Essar Steel Minnesota project.

Cliffs will celebrate the groundbreaking Thursday at an event in Toledo with Ohio politicians on hand. The company hopes to have its HBI plant up and running, with 130 employees, by 2020.

Cliffs CEO Lourenco Goncalves noted it will be the first HBI plant serving the Great Lakes region and said the high-quality iron product will help U.S. steelmakers make the highly specialized steel required by automakers and other high-tech industries.

"Today we are launching a new era for the iron and steel industry in the United States," Goncalves said in a statement Monday.

Cliffs expects to spend $50 million this year upgrading production at Northshore operations in Silver Bay to produce the new HBI-ready pellet, with more investment in 2019. But the upgrade will not include adding more employees, Goncalves told reporters at a February press conference in Eveleth.

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