Cliffs Natural Resources Inc. plans to go solo in 2018 with plans to build a direct-reduced iron (DRI) plant in the United States, the companys top executive said.
The planned facilitylikely to be the first of a series throughout the U.S.will have an annual capacity of 1.5 million tons, company chairman, chief executive officer and president Lourenco Goncalves said during an earnings call April 27.
The Cleveland-based iron ore miner and pellet producer will feed the plant with 2 million tons of direct-reduced (DR) grade pellets from its own operations, he said. Cliffs has said it sells DR-grade pellets to Charlotte, N.C-based Nucor Corp. as well as to Luxembourg-based ArcelorMittal SAs Canadian operations.
Cliffs primary market remains blast-furnace pellets for integrated steelmakers, Goncalves said. But the companys push into DRI should allow it to play a bigger role in a U.S. market increasingly dominated by mini-mills, which are hungry for more virgin iron units, he said.
Cliffs priority for 2017, nonetheless, is to pay down debt, so ground wont be broken for a DRI project until 2018, Goncalves said. The company is already in negotiations, however, with two suppliers of DRI plants, he said.