Cleveland-Cliffs Inc

Cliffs Natural Resources Inc.

Development of Taconite and Pelletizing

Development of Taconite and Pelletizing

While direct-shipping ore -- ore rich enough in iron content it can be shipped directly to market -- is plentiful in some parts of the world, in North America, such ore deposits were nearly exhausted by the end of World War II. There were abundant supplies of lower-grade iron taconite deposits, but no one had yet found a way to make them economically viable in blast furnaces. Cleveland-Cliffs and other partners pioneered the process of pelletizing lower-grade iron ore in the 1950s, and pellets remain the basic iron feedstock for integrated blast furnace steel production in North America today.

Cliffs' iron ore pellets perform superior to other products in the market due to the productivity it helps to drive in the customer’s blast furnace. As Cliffs pellets are homogenous in size, they rank at the top versus other comparable pellets with regard to consistency in size. This consistency allows air to flow through the furnace efficiently, and thus, drive the most optimal yield possible.

The other superior quality of the Cliffs product is that it minimizes pollution in the steelmaking process. Compared to a fines or sinter product, iron ore pellets have the advantageous homogenous qualities as well as much higher iron content. As a result, emissions from the blast furnaces are diminished. We believe that as pollution becomes more of an issue in China, more iron ore producers will continue to attempt to emulate the quality of Cliffs pellets while the market begins to shift in that direction.

Development of Taconite and Pelletizing

SuperFlux Pellet

In 2017, Cliffs completed a $75 million capital investment project at our United Taconite operation to produce a newly-developed superflux iron ore pellet. A flux iron ore pellet has increased levels of mainly CaO (calcium oxide or limestone) in comparison to a standard pellet. In a steelmaking blast furnace, limestone is added in order to control the chemistry of the slag. Flux pellets allow blast furnace operators to significantly decrease their coke rate and fluxstone usage versus standard pellets. A flux pellet will have higher melting properties in the blast furnace which means it converts from a solid state to a liquid state at a faster rate. This improved melting performance has a positive impact not only on iron production but also in reduced energy costs (coking coal) which is typically a significant cost component of operating a blast furnace.

Calculations show that coke use decreases by approximately 7% and limestone usage is virtually eliminated when using flux pellets in a blast furnace.

For every ton of standard pellets replaced by flux pellets, a downstream blast furnace reduces its greenhouse gas (GHG) emissions by approximately 230 pounds of CO2e. On a lifecycle basis, if United Taconite’s full standard pellet production capability were converted to flux pellets, its indirect Scope 3 downstream net GHG emissions would decrease by approximately 370,000 CO2e tons per year.

Development of Taconite and Pelletizing

Low-silica DR-Grade Pellets

Direct Reduced Iron (DRI) is a high quality metallic product (~90 percent pure iron) produced by the direct reduction of iron oxide at a temperature below the fusion point of iron. It is primarily used is in electric arc furnaces (EAF), but can also be used by blast furnaces and other iron and steelmaking applications.

Using its technical expertise to increase product offerings, Cliffs developed a new product line, DR-grade pellets, for feedstock in DRI production. In 2019, Cliffs completed a capital upgrade to produce low silica DR-grade pellets on a commercial scale at its Northshore Mining facility in Minnesota. It is the only facility in the United States capable of producing both DR-grade and regular blast furnace iron ore pellets. It will be producing pellet feedstock inventory for Cliffs’ Hot Briquetted Iron Plant in Toledo, OH, which will be commissioned in mid-2020.

Development of Taconite and Pelletizing

Hot-Briquetted Iron (HBI)

In June 2017, Cliffs announced that Toledo, Ohio is the location of our first hot-briquetted iron (HBI) production plant. The plant, expected to be completed in mid-2020, is being constructed on a brownfield site, exemplifying sustainable development by repurposing unused land.

Producing steel using HBI requires significantly less energy, and reduces indirect downstream Scope 3 greenhouse gas emissions, than traditional steelmaking processes. HBI can be added to a blast furnace or paired with an electricarc furnace. HBI will substantially improve energy efficiency and reduce Scope 3 greenhouse gas emissions, by up to 50% for the natural gas-based MIDREX® Direct Reduction Process paired with an electric arc furnace.

The availability of HBI in the Great Lakes region will begin another genesis to further improve the energy efficiency and lower the carbon footprint of the domestic steel industry. Natural gas and DR-grade iron oxide pellets are the only raw materials used in the HBI process. No hazardous or toxic by-products are generated from the process. Water recycling initiatives will conserve water use and minimize discharges.

200 Public Square, Suite 3300, Cleveland. OH 44114-2544 - Phone: 216-694-5700