New company plans to mine old Iron Range tailings dumps

June 10, 2008

June 10th (Duluth News Tribune) – Where others see mine waste, a group of Iron Range entrepreneurs see opportunity. Six investors, all with ties to mining, have combined resources to launch Magnetation Inc., a Nashwauk-based company that aims to reclaim iron from the tailing basins of long-retired natural ore mines.

Tailings are the processed rock byproduct of mine operations, and natural ore mines are the operations that fed the nation’s steel industry through the 1950s until they were replaced by taconite plants capable of handling lower-grade ore.

It’s common for the tailings from natural ore mines on the Range to have an iron content of 30 percent to 45 percent, said Larry Lehtinen, Magnetation’s chairman.

 

He said natural ore mines relied on density separation to sort iron from pulverized waste rock. But because these original mining operations weren’t very sophisticated, he said, a fair amount of iron slipped through and wound up in the tailings. Most of this missed ore is hematite, a form of iron oxide that’s only slightly attracted to magnets. Yet Magnetation claims to have developed a patent-pending process that effectively separates hematite from the mix using magnets.

At the heart of the process is a contraption developed by Al Fritz, former superintendent of the J&L Hill Annex Mine near Hibbing and Magnetation’s founder. Fritz dubbed his invention the ferrous wheel. Not to be confused with the carnival ride, Fritz’s machine uses permanent magnets and an amplifying matrix to generate an intense magnetic field that can attract materials that are only faintly magnetic.

Taconite pellet operations use weaker magnetic fields to remove iron oxide — in the form of magnetite — from the ore they process. However, conventional taconite plants do nothing to capture hematite, because hematite is not readily drawn to conventional magnets. Consequently, the tailings from taconite operations usually still have an iron oxide content of 12 to 18 percent.

Lehtinen said some day Magnetation’s system, including the ferrous wheel, could be retrofitted into taconite plants to boost their efficiency, but for now, the company has focused its initial efforts on recovering iron from the tailings of natural ore mines.

PERMITS PENDING

Magnetation has applied for a state disposal system permit from the Minnesota Pollution Control Agency and a mining permit from the Minnesota Department of Natural Resources. Lehtinen hopes to have the permits in hand by July and aims to begin processing tailings south of Keewatin in August. The proposed initial processing operation would have an annual production capacity of about 200,000 metric tons and probably would create about 20 seasonal jobs, probably April through October.

Lehtinen described the process as a wet operation that would start with the excavation of a starter pond in the tailings basin. This pit would be pumped full of water, and a dredge would be used to feed the tailings to a processing unit in a slurry form.

Because Magnetation will be handling preground materials, Lehtinen said it will require far less energy than conventional mine operations and should leave a relatively small carbon footprint. Waste from the plant — primarily silica removed from the tailings — will be returned to the basin in a terraced fashion.

“We plan to leave behind wetlands that will be valuable in their own right,” Lehtinen said. Magnetation plans to sell wetland mitigation credits as it completes work on the site.

“What intrigued me as an investor was not only what could be done with this waste rock but what could be done with wetlands.” said Tom Hammerlund Sr., one of Magnetation’s six investors. Hammerlund owns and operates a Grand Rapids construction firm that also works with wetland mitigation.

“One of the nice things about this process is that it would allow you to go back and reclaim material that’s already been mined, and at the end of the day, you’d have wetlands,” said Brian Hiti, deputy commissioner of Iron Range Resources, an agency considering financial support for the project.

“It’s definitely preferable to disturbing virgin land,” Hiti said.

VARIED MARKETS

Magnetation expects to produce a fine-grained concentrate with an iron content of about 65 percent — roughly the same as a taconite pellet. This concentrate could be turned into pellets, used to produce iron nuggets or sold as sinter feed for steelmakers’ blast furnaces. Lehtinen pointed out that several mills on the Great Lakes use sinter to produce steel, and they could be supplied by freighters. But he noted there also could be opportunities to ship sinter to Mexico via barge and rail. Lehtinen said it may even be feasible to ship sinter to China by way of rail and container ship. Many shipping containers return to China empty, creating attractive backhaul opportunities, he said.

Plenty of tailings

After well over a year of bench and pilot testing, Magnetation believes it is ready to launch its first commercial operation on the site of the Mesabi Chief No. 3 tailings basin, just south of Keewatin. The original mine ceased production in 1968. The property, now owned by Magnetation, was owned by Ed Shaughnessy, who once operated a dragstrip on the site and now is a partner in the company. The tailings on the property are about 25 to 30 feet deep, Lehtinen said.

The company projects it will be able to extract 500,000 metric tons of iron ore concentrate from the 110-acre site. Lehtinen said the company is negotiating with owners of 10 other tailing basins. He estimates that within 25 miles of Magnetation’s Nashwauk headquarters, there are enough tailings to produce about 50 million metric tons of concentrate. That’s equivalent to 12 years production of all the Iron Range’s taconite operations running at their current capacity, as determined by the state in 2007.

Magnetation expects its processing operations to be portable. Lehtinen referred to the setup as “a bumper-hitch plant.”

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