May 27, 2011

Project Status of Mesabi Nugget ITmk3® Plant

Mesabi Nugget is the world’s first commercial plant using the ITmk3® Process and is located at Hoyt Lakes in Northern Minnesota, USA. It is a joint venture between Steel Dynamics, Inc. and Kobe Steel, Ltd. Messabi Nugget successfully began production of ITmk3® Iron Nuggets on January 12, 2010. Since then, the plant has been increasing its output in accordance with an equipment and process optimization program. Nugget productivity has reached 80 %, and the plant has improved to 85 % during recent operation.

     Given the productivity and plant availability figures that have been achieved thus far, and considering that the major process controlling factors such as reactions in the rotary hearth furnance (RHF) did not show any significant problems, we have confirmed that the process works well. However, ramp-up of the nugget production rate has been slower than desired because of some mechanical issues. The major reason for the present intermittent operation and low plant output has been the coal conveyor system. Recently, a new conveyor system has been installed, and we are confident this will solve the conveyor issues.

     It is anticipated the plant will reach its annualized rated capacity of 500,000 metric tons in the latter half of the year.

     The quality of the iron nuggets has been very good. The total iron content has been consistently higher than is typical as that of pig iron. All products are used successfully in Steel Dynamics meltshops in Indiana and the melting characteristics are outstanding.

     As for the operational parameters such as unit consumption ratio of raw material and utilities, it is evaluated from the result so far obtained from the current operating conditions, that the target consumption figures will be achieved when the plant reaches full capacity.

     Based on the plant operation to date and the improvements underway, Kobe Steel is confident that Mesabi Nugget will achieve the desired results and the ITmk3 Process will provide an economical source of high quality iron for the world’s steelmakers.