U.S. Iron Ore Startup Company Magnetation Incorporated Expands Operations

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Researched by Industrial Info Resources (Sugar Land, Texas)--Magnetation Incorporated (Nashwauk, Minnesota) has signed a letter of intent with Mesabi Nugget LLC (Hoyt Lakes, Minnesota), an 81:19 joint venture of Steel Dynamics Incorporated (NASDAQ:STLD) (Fort Wayne, Indiana) and Kobe Steel Limited (PINK:KBSTY) (Kobe, Japan), to build a third iron ore beneficiation facility near Chisholm, Minnesota.

Magnetation has developed a mineral reclamation process using its patented Rev3 Separator Technology to extract iron ore concentrate from taconite tailings. With a price tag of $50 million, the 1 million-ton-per-year facility is expected to be operational by July 2012, pending the kickoff of construction later this year.

Mesabi Nugget, which will own 80% of the project (giving the company 800,000 metric tons of the project's proposed capacity), will use the concentrate supply temporarily to produce iron nuggets at its Mesabi Nugget plant in Hoyt Lakes until Steel Dynamics obtains permits to restart the Mesabi Iron Range open pit mine. With an expected 2014 production commencement, Industrial Info has been tracking the Mesabi Iron Range Mine project's progression since 2007. Magnetation will transport its 20% (200,000 metric tons) to customers in Mexico.

Meanwhile, site preparation is under way at the $70 million iron ore beneficiation Plant 2, located near Taconite, Minnesota, using the Holman Tailings Basin as a feedstock. With three of Magnetation's patented 1,333-ton-per-hour Rev3 Separators being installed, Plant 2 is expected to come online in spring 2012 and will have an initial capacity of 500,000 tons per year, ramping up to 800,000 tons per year by late 2012. Magnetation completed an expansion project at its Mesabi Chief Plant 1 in Keewatin, Minnesota, in June to increase capacity to 450,000 tons per year. With an initial capacity of 150,000 tons per year, commercial production began in February 2009 to process tailings from the Mesabi Chief Tailings Basin 3.

Earlier this year, Magnetation announced that the company is teaming up with a well-established corporate gaint, Cargill Incorporated (Minneapolis, Minnesota), to expand Magnetation's patented mineral reclamation process globally. The joined forces have been progressively studying potential sites throughout the world to build Magnetation process plants to suppy Cargill's customers.

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