A North Dakota company plans to build a $60 million iron-producing plant near Jamestown using iron ore concentrate from Minnesota.

 

A subsidiary of Bismarck-based Carbontec Energy Corp. called E-Nugget North Dakota LLC has unveiled plans to churn out 100,000 metric tons of iron annually using North Dakota sugar beet residue in the mix instead of coke coal.

 

The company hopes to break ground on the plant early in 2014 and be making iron nuggets by 2015, apparently using 160,000 tons of concentrate

 

annually produced by Grand Rapids-based Magnetation.

 

The E-Nugget iron-making process was developed by Carbontec and Michigan Technological University over the past five years, including large-scale batch tests at a Minneapolis facility, John Simmons, president of Carbontec, told the News Tribune on Monday. The company already has plans to expand to a 300,000-ton plant if the startup goes well.

 

Simmons said the Jamestown site is well- situated because of easy access to sugar beet residue feedstock and also because it is adjacent to a Great River Energy power plant and directly on the BNSF rail line. He said the iron ore concentrate could move from the Grand Rapids area to North Dakota in rail cars that move western coal east but generally have been empty on their return trip west.

 

“We can get the right quality material from Grand Rapids, and the rail routes make sense,” Simmons said.

 

The deal would give rapidly growing Magnetation yet another market for its recovered iron ore concentrate sifted out of waste dumps from old natural ore mines. Magnetation uses a patented recovery process to find tons of valuable iron ore at mines thought to be played out long ago.

 

Matt Lehtinen, president of Magnetation, told the News Tribune that he couldn’t comment on the deal Monday. A press release is expected today.

 

Magnetation already employs about 220 people at three ore recovery facilities on the Iron Range, two of which, near Keewatin and Taconite, the company owns and which send concentrate to a Mexican steel mill. The third plant, near Chisholm, is minority-owned by and supplies the Mesabi Nugget iron nugget plant near Hoyt Lakes.

 

Magnetation expects to start construction on a fourth plant northwest of Coleraine this year. That plant will produce 2 million tons of concentrate annually and will be ready to feed a new Indiana pellet plant the company now is building to supply partner AK Steel with iron ore for its furnaces by 2015. That new Itasca County facility is expected to employ another 160 people. The Coleraine plant ultimately will shift to get its ore from traditional open pit mining. (The company has shelved plans to build a recovery plant at Calumet.)

 

Simmons noted Carbontec also created anE Nugget Minnesota LLC and considered building the plant in Minnesota using wood waste from logging sites as the reductant or binder. He said the company chose North Dakota instead, in part because it’s so much easier to get permits in North Dakota.

 

The new North Dakota plant would be part of a growing trend in the industry to create iron in a form useable by electric-arc or mini-mill steelmakers. Mesabi Nugget near Hoyt Lakes already is making a similar product used to make steel by its parent company, Steel Dynamics. Essar Steel is planning to make taconite concentrate that can be used to make iron for mini-mills and is considering its own iron plant in Nashwauk. Cliffs Natural Resources also is considering transforming part of its NorthShore Mining operations to make concentrate for the directly reduced iron market, again aimed at electric arc furnaces instead of traditional blast furnaces.

 

Simmons said the new nuggets will be 96 percent pure iron and also very low sulfur content because no coal is used. He said the process will consume less energy and produce less pollution, including carbon dioxide emissions, than traditional iron-making processes.

 

“Our product will be very similar to Mesabi Nugget but not really in competition with them because they use all their own product,” Simmons said.

 

He said the new company already has a buyer lined up to purchase the North Dakota iron nuggets, although he wouldn’t name the buyer.

 

“Most of the iron made in the U.S. is used by the companies that make it. There isn’t a lot of merchant market pig iron out there, and what there is is coming from Russia or Brazil or the Ukraine. That’s where we’ll come in.”

 

The Jamestown plant will create about 40 jobs to start. The company said it also plans to sell waste gas from the process to use for energy.