Capabilities and Customers = magnetic attraction. Iron resources transform into gold for this Minnesota-headquartered company. Lorie Greenspan describes the modern alchemy.
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Magnetation has tapped into iron resources and turned it into gold (success, that is) at the same time building a pioneering legacy.
Also, the company may dig from the ground up, but it leaves behind a sustainable landscape.
For sure, this is no hit-and-run organization. Abandoned iron waste is no longer left behind, thanks to Magnetation, a specialty iron ore mining company that couples success with environmental responsibility.
Meanwhile, Magnetation deploys proprietary Rev3™ mineral processing technology to recover high-grade iron ore concentrate (MagCon™) from lowgrade hematite iron resources including tailing basins, lean ore stockpiles, and virgin ore bodies.
Digging it up, separating it out, and then processing the material into ore for distribution to Mexican steel giant AHMSA has given Magnetation a name on the Minnesota range, where old mining sites have left their stories buried in the ground.
With plants operating in Minnesota, Magnetation recently announced a venture in Indiana to build a new iron ore pellet plant. Magnetation LLC, a joint venture between Magnetation and AK Steel, will build the new plant in Reynolds, Ind., which will produce high-quality iron ore pellets, a critical raw material in the steelmaking process. Magnetation anticipates breaking ground during the first quarter of 2013, with operations on line by late 2014 or early 2015. The development should provide as many as 120 jobs.
Advantageous logistics also comes into play: “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, at the time the plant announcement was made.
Lehtinen’s son, Matt, the company’s president and COO, added in a recent interview, “The Reynolds plant is critical to growth for our Minnesota operation” acting to expand production capability by 2 million metric tonnes of concentrate per year using the most advanced process of automation.
The new configuration will enable Magnetation to transport iron ore concentrate from its mineral recovery operations in Northern Minnesota to the Reynolds plant. 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 (approximated within the $300-$350 million range). An additional iron ore concentrate capacity – to be constructed in Northern Minnesota – could require another expenditure of $120 million.
Old Gold – Rolled and Sold
To see where the company is headed, it’s constructive to take a look back. In the early 1800s, large stores of natural ore – hermatite and magnetite – were found in Minnesota’s mountain ranges. Waste from mining the iron contained lower grades of iron and other materials and was left behind when mines were shut down. In addition, the iron tailings left behind were thought to be less valuable; no one knew how to mine the lower grades of iron.
In 1974, Al Fritz, a retired miner and engineer from Minnesota, partnered with a friend to invent a machine that created a magnetic field that separated the remaining iron from other waste materials. They called their machine the Ferrous Wheel, and we’re not talking about a carnival ride.
Still, the company made a grand entrance, as if it was pedaling in town on a Ferris wheel. No doubt this exuberant company would like to ride the double-decker model – which would have been a reckless but compelling entrance, one that would underscore the fact that no solid business plan was in place. But soon a visionary entered the picture: Larry Lehtinen. He believed there was value in legacy iron resources. With cards held close to his chest, he tossed some highly valued chips into the pot. Risk paid off. In December 2008, he became principal owner, CEO and chairman of the board. He played his cards right and held a full house.
Magnetation’s technology development efforts began in 2008 at its Plant 1 near Keewatin, Minn., which reached an annual capacity of 300,000 metric tonnes during December 2011. Magnetation’s second plant, located near Taconite, Minn. (which commenced operations in June 2012 with an initial annual capacity of 800,000 metric tonnes per year) is expected to ramp up to a target annual capacity of 1,200,000 metric tonnes.
Looking at future annual capacity, expect to see 1,800,000 metric tonnes coming from plants 1, 2 and 4. On top of that, anticipate further output from plants under development by Magnetation and its AK Steel subsidiary.
“We quickly built plants to react to volatile iron ore market,” notes Matt Lehtinen. “We built the first plant in seven months in Minnesota and the second one in eight months.”
In addition, Magnetation is also a 20-percent owner of and process technology supplier to Mining Resources, LLC, who boasts a subsidiary of Steel Dynamics. You couldn’t enter into a more advantageous joint venture. Now, Mining Resources is building a third plant east of Chisholm, Minn. (Plant 3) expected to contribute an annual capacity of one million metric tonnes.
Such processing numbers are only possible through cutting edge technologies, such as Magnetation’s Rev3™ Separator, which replaced the Ferrous Wheel, and was designed and built to effectively separate weakly magnetic particles from waste minerals consistently, accurately and with efficient throughput. Its features included a feed capacity of 1,333 of dry metric tonnes (dmt) per hour on a single pass on a multi-layered carousel on 8kw of power.
According to the company, the Rev3 was designed by engineers working from a “clean sheet of paper.” It takes a great deal of imagination to turn a blank page into an industry novel, but that’s what the engineers accomplished. Magnetation engineers focused specifically on high volume, with high availability iron ore applications. The purpose of the Rev3 design was simple in that it was single focused; but it was complex in what it accomplished: a machine that surmounted traditional drawbacks of wet high-intensity magnetic separation (WHIMS). These drawbacks included complex mechanical and electrical systems, high electrical energy consumption, tendency to foul with misplaced particles and debris in the slurry, and the resulting high operating costs and poor equipment uptime.
“The novelty and simplicity of the Rev3™ design creates significant value in the technology,” the company states. “The end result is very high equipment availability, throughput, and metallurgical efficiency. The Rev3™ utilizes ‘off of the shelf’ ferrite permanent magnets, employed in a unique geometry along with a proprietary flux amplifying matrix.”
In addition, the Rev3™ has a carousel design orientation in order to maximize the working volume of the machine. It can be configured with multiple table layers along with multiple magnetic beneficiation upgrade steps. Within a single Rev3, the machine can be configured with one to four passes along with multiple steps of scavenging. Further, the machine can be reconfigured from one set up to another in less than two hours of downtime if the parts are on hand.
All said and done, Magnetation leaves only a small trace of operational evidence. That’s its genius. Also, the company’s technology is environmentally sustainable: iron waste tailings basins and stockpiles converted into ecologically functioning land forms by extraction of valuable iron ore concentrate, followed by reclamation and re-vegetation of the land. Unlike most iron mines, the company does not strip any undisturbed land forms to access the ore and does not discharge any mining or process water into the natural environment.
On the Frontier
One other thing places Magnetation at the forefront: Its agreement with Cargill. In this arrangement, both companies will explore opportunities to develop and utilize Magnetation’s proprietary mineral processing technology – a purpose that places Rev 3™ separator technology front and center.
As part of the agreement, Cargill has exclusive, worldwide rights to jointly develop and apply the technology with Magnetation. Further, it can market recovered iron concentrate to international iron ore customers. The arrangement gives it that right.
From Magnetation’s perspective, the agreement – with all of its commercial aspects – will foster technologic introduction on an international basis. In essence, you’re looking at a new source of high-grade concentrate from existing resources. And that means economic and ecological benefits. It means “real commercial value” to the global iron industry, and the positive environmental impact. This company is not one to take us down the so-called primrose path when it comes to social responsibility. Promises made are promises kept.
“Footprint,” proclaims Larry Lehtinen.
That’s all he needs to say.