U. S. Steel Plans $350 Million Restart of Taconite Production Line on Mesabi Iron Range

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Researched by Industrial Info Resources (Sugar Land, Texas)-- U.S. Steel Corporation (NYSE:X) (Pittsburgh, Pennsylvania) is planning a $350 million restart of a taconite production line on the Mesabi Iron Range in northern Minnesota. U.S. Steel's Minnesota Ore Operations consist of two plants in the area: the Minntac plant in Mountain Iron and the Keewatin Taconite (KeeTac) plant about 25 miles to the west. Iron-bearing taconite rock is mined and processed into taconite pellets for use in the steelmaking process. In 2003, U.S. Steel bought the former National Steel Pellet Company's taconite plant in Keewatin. The company currently employs 370 at the Keewatin facility and 1,170 at its Minntac facility.

Since 1980, one of the production lines at the KeeTac pellet plant has been idle. But better times are ahead with the prospect of not only adding 3.6 million tons of production capacity per year, but also creating 75 permanent jobs. In addition to the new full-time jobs, the project will require 400-500 temporary construction jobs.

U. S. Steel plans to select a main engineering and construction firm early next year to help complete the detailed engineering, and select subcontractors and construction workers that will be needed to see the project to completion. Construction on the project is expected to start in late 2009 or early 2010. It's expected to take up to three years to fully restart the line after all of the permits are in place. The project is also designed to enhance overall environmental performance, modernize and improve the line, and support an overall long-lasting viability of the Minnesota Ore Operations.

The restart will employ energy-efficient technologies with new emission controls that will exceed current environmental standards. Upgrades in the mining, concentrating and agglomerating processes will support the increased production requirements. The additional mining equipment and the installation of new processing equipment are part of the overall proposed budget. Some of the increased production is expected to find its way to U. S. Steels' Canadian operations. It would appear that the company is armed with a competitive advantage because of its mining assets. Being able to supply itself with some of the materials needed for steel production can significantly help to control increases in the price of raw materials that other steel producers must endure.

The Minnesota Ore Operations are not all about the building of new, but also about protecting the old. In April 2006, the KeeTac facility took the initiative to enroll 10,420 acres of its property in a state program created by the Sustainable Forest Incentive Act (SFIA) to be used for public recreation. The state of Minnesota created the Sustainable Forest Incentive Act in 2001 "to encourage the state's private forest landowners to make a long-term commitment to sustainable forest management." What this means is that the general public can enjoy year-round, non-motorized access to the property for hunting, trapping and other outdoor activities. The tailings pond reservoirs are not part of the SFIA land and fishing is not permitted on those reservoirs. Once property has been enrolled in the program, a commitment of at least eight years is required.

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