Tuesday, November 27, 2012 By Aaron Brown
The press release follows:
Magnetation LLC to Build Iron Ore Pellet Plant in Reynolds, Indiana
GRAND RAPIDS, MN, November 27, 2012 – Magnetation LLC (Magnetation) announced today that it has selected Reynolds, Indiana as the site to build its new iron ore pellet plant. The new facility will produce high- quality iron ore pellets, a critical raw material in the steelmaking process. Magnetation currently anticipates breaking ground during the first quarter of 2013. The plant is expected to become operational in late 2014 or early 2015 and employ approximately 100-120 people.
“With convenient access to major railways and highways, Reynolds is an outstanding location for the company’s new pellet plant,” said Larry Lehtinen, CEO of Magnetation. “We thank our local and state officials in Indiana for their ongoing support of our company, and we look forward to joining the Reynolds community in the very near future.”
Magnetation will transport iron ore concentrate from its mineral recovery operations in Northern Minnesota to its new plant in Reynolds. The concentrate will be converted into high-quality iron ore pellets for use by AK Steel Corporation. Magnetation expects that the pellet plant itself will require a capital investment of approximately $300-$350 million, with additional iron ore concentrate capacity to be constructed in Northern Minnesota requiring another estimated $120 million investment.
The company had suggested Indiana was the leading candidate in recent months. Chief customer AK Steel's location there was among the considerations. It's a very disappointing occasion for northern Minnesota, where officials had vowed to clear the regulatory way for the company. In the end, this decision appears to be related to cost savings on the company's production and rail lines.
UPDATE: The Star Tribune writes about the two new processing facilities on the Iron Range related to this expansion, adding to Magnetation's workforce here. Make no mistake, Magnetation has done a lot of northern Minnesota hiring these last two years. The story is interesting for its specific iron ore price projections by Magnetation officials.