Eye On Mining: A first look at the $90M upgrades at Northshore Mine

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SILVER BAY, MN — Northshore Mining, which originally operated as Reserve Mining Company, was the first taconite processing facility in North America when it opened in 1956.

Fast forward to 2019 and the Silver Bay facility will be making history again, this time as the only low-silica pellet producer in the United States.

In the midst of the excitement, Cleveland-Cliffs President and CEO, Lourenco Goncalves, describes the mining company as “realistic.”

“I don’t do things for showing. I do things that last and that’s how I run this company. I’m running this company not for now, not for this quarter, but for the next decade, for the next generation, for the next 50 years. These are the seeds we are planting here.”

In Silver Bay, those seeds have a $90 million price tag.

That money is going towards upgrades at the Northshore Mine to prepare the site to be the main supplier to Cliffs new Hot Briquetted Iron (HBI) facility in Toledo, OH.

“We are setting a new standard,” said Goncalves while visiting the Silver Bay facility.

Cliffs hired 250 construction workers to get the job done, but Goncalves said it hasn’t come without its challenges.

“This is a complicated project. We are building inside an operation that is active. So it’s not easy.”

The upgrades consist of two main things.
First, upgrading the process to produce DR Grade pellets at the right rate.
Second, upgrading the conveyor system to handle two products at the same time.

It was only a few years ago that Northshore was shutdown, along with many other mines in the area, but it’s a different story today and it’s one Northshore’s General Manager, Paul Carlson, is happy to tell.

“It’s exciting. Very exciting. It’s good for Northshore, it’s good for the future, it’s good for the Iron Range.”

According to Cliffs, the economic impact is occurring before production even begins.
The company says a large chunk of its investment is going towards hiring local tradespeople, and the rest is for equipment and materials, including fabricated steel from the region.

So what does this mean for the future of the Northshore Mine?

“It means the life expectancy of Northshore has been extended, by a lot,” said Goncalves.

The CEO said the U.S. is seeing a consistent trend of blast furnaces being shut down and at the same time electric arc furnaces are being built, and replacing blast furnaces. As the technology in the industry shifts, Goncalves said Cliffs is moving with it.

“We are becoming more and more in-tune with this development that continues to go on in the United States. We are ahead of the game. We have nothing to learn from the outside. We need to influence the outside and show the people here in the United States how good we are, and then they should be proud.”

While Northshore’s operations in Silver Bay and its mine in Babbitt will be the first to produce low silica grade pellets, Goncalves said he’s confident it won’t be the last.

“I believe that after HBI 1, that we are building in Toledo, we will have HBI 2. And I hope–at this point it’s still hope–that Governor Walz will do the right thing and keep the squatters out of my land and will give me the ability to start doing something there. The something that I want to do is the second HBI plant, and that would be right there in Nashwauk, and that will benefit the communities out there–particularly Itasca County that has been played like a violin by Essar and by the Itasca County politicians. So, we need to fix that, and I hope that Governor Walz will do the right thing.”

In the meantime, Goncalves said he’s proud of the work Cliffs is doing and is looking forward to a bright future ahead.

“I’m doing the stuff that people don’t see, or they see, but they see later. That’s how I do things. I don’t do things to show CNBC or Bloomberg. I do things that I want the community that we operate to know about, and be proud and work together with us.”

Cliffs expects the work at Northshore to wrap up in June of this year, and they anticipate they will be preparing for production within that timeframe.

Kristen Vake

Kristen Vake

Anchor, Reporter

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