We learned this week that an upstart Iron Range company, Magnetation, will push its iron recovery technology worldwide through international giant Cargill .
Magnetation is one of the more amazing stories coming out of Minnesota’s Iron Range, a mining region that often produces rags rather than riches stories.
The company is using its patented technology, the Rev3 Separator, to recover marketable iron concentrate from old waste piles — the stuff just left behind from northeast Minnesota’s long natural iron mining industry. It’s so promising that the people at Cargill’s iron division, Cargill Ferrous International, recognize its worldwide potential — enough to make an undisclosed investment into a partnership plan to explore how the process might be applied elsewhere.
Magnetation’s heroes include long time Iron Range mining engineer Al Fritz, who came up with the process that apparently uses a lot of water and a big wheel to pull iron from not very magnetic hematite.
Larry Lehtinen is the company’s CEO. Lehtinen’s resume includes his part starting up Mesabi-Nugget, a partnership between Japan’s Kobe Steel and lead partner Steel Dynamics Inc. in a new plant hear Hoyt Lakes, that company is producing iron nuggets with much higher iron concentration than today’s taconite pellets.
Magnetation just inked an agreement to send concentrate by train from the Iron Range to a Mexican steel producer. When up and running, it will send 120 car unit trains of ore on a 1,500-mile journey to Mexico steel producer AHMSA. Even at that distance, Magentation can compete with ore from South America.
In fact, Lehtinen has said, Magnetation is the nation’s lowest cost iron concentrate producer; beating out the taconite companies and rivals like Mesabi Nugget.
When founded a couple of years ago, Magnetation was envisioned as a warm weather producer that would work old waste piles in the sunnier seasons. Instead, the company put up a big bubble dome over the work site to allow year-round operations.
Magnetation has so far been working the old Mesabi-Chief Mine near Keewatin, turning out 160,000 metric tons a year.
While company officials haven’t revealed terms of their deal with Cargill, they say they’ll now be able to expand that operation to full production around 450,000 tons a year; and begin work on a second site, near the town of Taconite; which will help the combined operations approach one million tons a year.
There’s so much recoverable ore laying around in waste piles, it could take 50 years to thin it out.
When done reprocessing waste piles, Magnetation plans to leave behind wetlands, that the company will be able to sell. Many companies need to purchase wetlands to mitigate wetland acres lost to new developments.
It’s a good time to implement new ways to mine. Iron ore that sold for about $30 a ton in 2001, now trades at about $170 dollar a ton, according to Metal Bulletin Research’s Iron Ore Index.
So, don’t be surprised to see a bunch of Magnetation operations up north in the coming years, and quite possibly world-wide.