The search for competitive iron alternatives
in the currently high-priced raw materials market has sparked a
new company with a veteran industry executive at its helm to
step up to the plate.
The company, Magnetation Inc., Nashwauk,
Minn., hopes to produce additional raw material for the North
American steel industry by late summer using mineral leftovers
from years of iron ore mining in northern Minnesota. It has
developed a patent-pending mineral processing technology
capable of recovering iron ore concentrate from such materials
as hematite-classified as non-magnetic, though actually very
weakly magnetic-that are left in lean ore stockpiles and
natural ore tailing basins scattered across Minnesota's Mesabi
Larry Lehtinen, chairman of Magnetation, has
30 years' experience with established and entrepreneurial
ventures in the iron ore industry. He opted to create the new
enterprise for partially personal and partially professional
reasons. "The main reason is a man can only golf so much," he
quipped. "I am a mining engineer by training and I did work
similar to this in my early career so I have a soft spot in my
heart for this kind of technology."
Lehtinen has extensive experience with iron
mining and iron-related technology. He served as a vice
president at Inland Steel Mining Co., Cleveland-Cliffs Inc. and
Steel Dynamics Inc. (SDI). He left SDI in 2000 to form two
entrepreneurial ventures Ferrometrics Inc., a consulting firm,
and Mesabi Nugget LLC, which demonstrated iron nugget-making
technology. He sold Mesabi Nugget to SDI in 2007 and remains a
consultant on that project, in which SDI and Japan's Kobe Steel
Ltd. are cooperating to make nuggets for SDI to use in its
Magnetation intends to produce material that
extends the life of the Minnesota iron range and offers
steelmakers a competitive iron alternative amid rapidly rising
raw material costs (the benchmark price of iron ore fines, for
example, rose 65 percent this year compared with 2007).
The Magnetation product, which Lehtinen said
is similar to fines both chemically and metallurgically in that
it contains 65-percent iron, will be priced in accordance with
the benchmark eastern Canadian ore concentrate price. The
Magnetation concentrate can be sold as feed for sinter plants
at steel mills, for rotary hearth furnace-based direct-reduced
iron (DRI) plants and for other iron-making technologies.
The value of the Magnetation product comes
when steelmakers or DRI producers purchase it instead of
international ore. "We're competing against sinter coming from
Brazil," Lehtinen said. "There's at least a $75 (per tonne)
freight cost coming from Brazil. We can get it there
North American steel industry demand could
easily absorb Magnetation's 1-million-tonne addition to the raw
materials marketplace, Lehtinen said. Magnetation also will
consider international sales, but high freight costs could
prohibit that from occurring.
In addition to turning former ore waste into
a valuable steelmaking product, Magnetation's technology will
allow the company to process as-yet-unmined lower-grade
material previously believed to be unprofitable.
The venture also is ecologically conscious,
Lehtinen said. Once Magnetation processes waste iron into
usable ore concentrate, the company will turn the exploited
land into ecologically functioning wetland. "Our work reshapes
useless land into environmentally functioning land that had
been covered with stockpiles that existing taconite miners
cannot use," he said. "This technology proves it's
Magnetation thus will not only make money
selling its concentrate, but it can sell credits for wetland
creation to other companies involved in land-use projects.
"There are a number of new projects going on in upper
Minnesota," he said, pointing to Polymet Mining Corp.'s
recovery project at an old LTV Corp. site, Minnesota Steel's
embryonic ore and steelmaking facility and the two separate
nugget plants being developed by SDI and Cleveland-Cliffs. "It
looks like a technology with an environmentally positive spin
to it. It fits really well with green technologies."
Lehtinen said production will start shortly,
although he didn't provide a specific estimate.
The company represents a long-term venture in
a cyclical industry, he added. "You never know how long it (the
industry) stays up, but with our low-cost structure, offering
low-cost iron units, we'll be around. We have enough to run at
1 million tonnes (annually) for 50 years."