Author Topic: New Plant at Reynolds  (Read 84021 times)

IndyHog

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New Plant at Reynolds
« on: November 27, 2012, 01:12:18 PM »
A Minnesota-based mining company plans to spend as much as $350 million to build a iron ore pellet plant in Indiana, creating up to 100 jobs by 2015, the company announced Tuesday morning.

Magnetation LLC, of Grand Rapids, Minn., said it would break ground on the plant in Reynolds in the first quarter of 2013. Reynolds is about 25 miles north of Lafayette.

When it becomes operational in 2015, the plant will produce iron ore pellets, a critical raw material in the steelmaking process, for use by AK Steel Corp. Magnetation will transport iron ore concentrate via rail from its operations in northern Minnesota to Reynolds.

"With convenient access to major railways and highways, Reynolds is an outstanding location for the company's new pellet plant," Magnetation CEO  Larry Lehtinen said in a prepared statement.

The Indiana Economic Development Corp. offered MagPellet LLC, a Magnetation subsidiary, up to $1.5 million in conditional tax credits and up to $200,000 in training grants based on the company's job-creation plans.

The Indiana Department of Transportation also will assist the project by improving rail service to the site. White County is offering additional financial support using revenue from a tax increment financing bond.

Utility NIPSCO said it will provide the company $23 million in additional energy and infrastructure incentives.

The Magnetation plant will use a site that was graded and prepared for a high-profile ethanol refinery project late last decade, but was never completed after VeraSun Energy Corp. went bankrupt.

"This announcement is a huge shot in the arm for the local economy in Reynolds and White County," said John Heimlich, president of the White County commissioners, in a prepared statement.
 
Sounds like the Monon may get a little busier. Maybe time for some upgrades ie; new rail, better signaling?
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shane_man15

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Re: New Plant at Reynolds
« Reply #1 on: November 27, 2012, 01:19:54 PM »
They didn't really say 'where' in Reynolds this place would be. So, the question is: Who has the contract for rail service?
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CSX_CO

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Re: New Plant at Reynolds
« Reply #2 on: November 27, 2012, 01:32:54 PM »
Wait a minute.  They're going to bring the ore by train to Reynolds to convert it to Pellets, then ship it off to other mills?  Aren't there taconite plants shut down in the Iron Range for lack of business?  What am I missing?  That seems counter productive?  Or is this a new source of ore not near the traditional plants?

I'd wager, that CSX would get the business as heavy ore traffic would probably destroy the TPW without some major rebuilding.

Good on CSX for drumming up this business though, hopefully the plant comes to fruition and generates some traffic unlike the previous site plan of another ethanol plant.

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« Last Edit: November 27, 2012, 01:51:01 PM by CSX_CO »

IndyHog

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Re: New Plant at Reynolds
« Reply #3 on: November 27, 2012, 02:15:11 PM »
It does sound confusing. The best place to convert ore to pellets is near the source. However the Indy Star is characterizing this company as an "iron waste recycler" Is this some sort of   by-product coming from the steel mills in northwestern Indiana?

http://www.indystar.com/article/20121127/BUSINESS/211270333/Iron-ore-plant-sub-ethanol-White-County?odyssey=mod%7Cnewswell%7Ctext%7CIndyStar.com%7Cs&nclick_check=1
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shane_man15

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Re: New Plant at Reynolds
« Reply #4 on: November 27, 2012, 02:19:50 PM »
It does sound confusing. The best place to convert ore to pellets is near the source. However the Indy Star is characterizing this company as an "iron waste recycler" Is this some sort of   by-product coming from the steel mills in northwestern Indiana?

http://www.indystar.com/article/20121127/BUSINESS/211270333/Iron-ore-plant-sub-ethanol-White-County?odyssey=mod%7Cnewswell%7Ctext%7CIndyStar.com%7Cs&nclick_check=1
Quoting from WLFI: "The new facility, which will create those 100 jobs by 2015, will also produce high-quality iron-ore pellets, a critical raw material in the steelmaking process."

http://www.wlfi.com/dpp/news/local/iron-company-to-build-plant-create-100-jobs
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E-Unit

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Re: New Plant at Reynolds
« Reply #5 on: November 27, 2012, 02:33:16 PM »
The VeraSun property is on the northeast quadrant of the diamond.  All the loop tracks were built, but no building was made. Perfect place to start up assuming the new purchaser of the taconite is somewhere south of there. Wonder who would be purchasing it? Nucor only uses scrap right? maybe they are about to change things up a bit.

Track improvement would probably include a new connection track. As far as signaling goes its almost all new from Munster through Monon and theres nothing wrong with the Monon signals from there to Reynolds. Power switches/siding signals at Surrey might help move the extra traffic. its hard to say until we see how much carrage it takes in. Could be small enough that the local could take care of it.
« Last Edit: November 27, 2012, 03:15:32 PM by E-Unit »
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CSX_CO

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Re: New Plant at Reynolds
« Reply #6 on: November 27, 2012, 02:38:11 PM »
It does sound confusing. The best place to convert ore to pellets is near the source. However the Indy Star is characterizing this company as an "iron waste recycler" Is this some sort of   by-product coming from the steel mills in northwestern Indiana?

http://www.indystar.com/article/20121127/BUSINESS/211270333/Iron-ore-plant-sub-ethanol-White-County?odyssey=mod%7Cnewswell%7Ctext%7CIndyStar.com%7Cs&nclick_check=1

I've heard of mines that were played out going back and using the tailing piles to glean a bit more ore out of it.  A lot of the mines in Minnesota did this when demand was extremely high from China a few years ago.  They usually didn't do this because it was so expensive to draw what little ore there was out of the tailing pile.  Even then, it was close to the source, and from the sound of the article they'll be bringing this stuff down from Minnesota to do this.   

Their website says they take the waste (tailing) and concentrate it.  I'd imagine its going to take a couple trainloads of the waste to get even one train load of concentrate?  Oh well, more business for CSX.  Just nice to see the state isn't giving them a HUGE loan or handout to bring the business here. 

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CSX_CO

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Re: New Plant at Reynolds
« Reply #7 on: November 27, 2012, 02:46:15 PM »
The VeraSun property is on the southeast quadrant of the diamond.  All the loop tracks were built, but no building was made. Perfect place to start up assuming the new purchaser of the taconite is somewhere south of there. Wonder who would be purchasing it? Nucor only uses scrap right? maybe they are about to change things up a bit.

Track improvement would probably include a new connection track. As far as signaling goes its almost all new from Munster through Monon and theres nothing wrong with the Monon signals from there to Reynolds. Power switches/siding signals at Surrey might help move the extra traffic. its hard to say until we see how much carrage it takes in. Could be small enought that the local could take care of it.

North east quad.  I remember seeing trailers full of rail going into that place when they were first starting it. 

Be interesting to see how this plays out.  I would think they'd need unit trains of the waste to make a go of it.  They say their major user will be AK steel.  I would imagine it would take a pretty big investment on NUCOR's part to add the additional infrastructure needed to handle pellets.  Plus, don't you need a blast furnace to convert the raw ore into something an electric furnace or BOF can use?  I didn't think you could put pellets directly into a electric furnace because of the impurities still in the iron?  You need the furnace to convert it over to usable iron, then convert it to steel?  The pellets aren't like high grade scrap steel where most of your impurities are already removed.

Anyway, ore could come down from Minnesota via the BNSF/UP and to CSX at Chicago.  -OR- if RA/G&W wants in on it they could interchange from the BNSF at Galesburg/Peoria and bring the ore that way.  I would think heavy trains of ore would just tear that railroad to shreds without a lot of track work.

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scraphauler

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Re: New Plant at Reynolds
« Reply #8 on: November 27, 2012, 03:15:01 PM »
CSX_CO is correct - this is tailing's and other low Fe waste.  They process this waste (in Minnesota) into a Hematite Concentrate which is 65% Fe and basically looks like black sand.  The new Indiana plant (to be built at the aborted VeraSun property) will take this concentrate (likely shipped inbound in covered hoppers) and pelletize the concentrate into iron ore pellets, which will feed the AK System of mills (AK is 49.9% owner of Magnetation).

Hematite load out is on BNSF in Grand Rapids MN.  G&W seems to have several big deals cooking for future business on some of the area lines they will be getting from RA - wonder if this could be one of them.  Looks to be just as easy for BSNF to give to TPW in Peoria vs CSX in Chicago.  New plant won't be up and running until Nov 2014, so plenty of time to rebuild the TPW should G&W be so inclined.

Nucor has already gone down this road long ago, having a Direct reduced iron (DRI) plant in Trinidad and another one under construction in Louisiana.  This is a somewhat similar process where iron ore is directly reduced becoming 85-90% pure Fe pellet which can be used in electric furnaces as well as blast furnaces, foundries, etc.  as opposed to the 65% pure Fe Magnetation will make for blast furnaces. 

HBI,  or Heat Briquetted Iron, is what many railfans and railroaders refer to as pig iron and is a common commodity handled in gons (CIND/IORY run unit trains of it off Ohio River to Northstar Steel).  This is simply DRI pellets compressed and formed into a briquette. 
« Last Edit: November 27, 2012, 03:29:30 PM by scraphauler »
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bn13814

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Re: New Plant at Reynolds
« Reply #9 on: November 27, 2012, 03:43:37 PM »
CSX_CO is correct - this is tailing's and other low Fe waste.  They process this waste (in Minnesota) into a Hematite Concentrate which is 65% Fe and basically looks like black sand.  The new Indiana plant (to be built at the aborted VeraSun property) will take this concentrate (likely shipped inbound in covered hoppers) and pelletize the concentrate into iron ore pellets, which will feed the AK System of mills (AK is 49.9% owner of Magnetation).

Hematite load out is on BNSF in Grand Rapids MN.  G&W seems to have several big deals cooking for future business on some of the area lines they will be getting from RA - wonder if this could be one of them.  Looks to be just as easy for BSNF to give to TPW in Peoria vs CSX in Chicago.  New plant won't be up and running until Nov 2014, so plenty of time to rebuild the TPW should G&W be so inclined.

Nucor has already gone down this road long ago, having a Direct reduced iron (DRI) plant in Trinidad and another one under construction in Louisiana.  This is a somewhat similar process where iron ore is directly reduced becoming 85-90% pure Fe pellet which can be used in electric furnaces as well as blast furnaces, foundries, etc.  as opposed to the 65% pure Fe Magnetation will make for blast furnaces. 

HBI,  or Heat Briquetted Iron, is what many railfans and railroaders refer to as pig iron and is a common commodity handled in gons (CIND/IORY run unit trains of it off Ohio River to Northstar Steel).  This is simply DRI pellets compressed and formed into a briquette.

Would this black sand be any heavier than coal? TP&W/AT&SF/TP&W handled about three 90-car coal trains from CSXT at Watseka westward to a CILCO power plant at Sommer, Illinois for about a decade through December 1992. Most of the line is welded rail so I'd expect a major crosstie replacement program could bring the line up to standard.

CSX_CO

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Re: New Plant at Reynolds
« Reply #10 on: November 27, 2012, 03:54:59 PM »
Would this black sand be any heavier than coal?

That's like asking what weighs more, a pound of gold or a pound of feathers.  ;D  Probably depends on how much they want to load.  Probably more cost effective to them to load it in 286K cars, vs 263K cars.  Iron ore is pretty dense, so I'd wager the car would load out before it cubes out.  I *think* TPW is technically good for 286K cars?  To be honest, I've never really paid attention to the weights of stuff coming off them at Lafayette.  Either way, this *should* be a decent source of revenue for CSX or G&W when/if the plant comes on-line, if marketing doesn't screw it up for operations.

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E-Unit

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Re: New Plant at Reynolds
« Reply #11 on: November 27, 2012, 04:23:15 PM »
If it is like "sand", you would think it would be loaded into 2 bays like sand service cars. Those are heavy little guys. The Monon is used to those already with all the sand and concrete 2 bays going back and forth.  If the GW gets it, good for them. I would prefer the Monon  though because its in my front yard  :P :P
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bn13814

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Re: New Plant at Reynolds
« Reply #12 on: November 27, 2012, 04:26:14 PM »
That's like asking what weighs more, a pound of gold or a pound of feathers.  ;D  Probably depends on how much they want to load.  Probably more cost effective to them to load it in 286K cars, vs 263K cars.  Iron ore is pretty dense, so I'd wager the car would load out before it cubes out.  I *think* TPW is technically good for 286K cars?  To be honest, I've never really paid attention to the weights of stuff coming off them at Lafayette.  Either way, this *should* be a decent source of revenue for CSX or G&W when/if the plant comes on-line, if marketing doesn't screw it up for operations.

Practice Safe CSX

I guess my question was poorly-worded.  ::) Yeah, I think TP&W is good for 286K cars. IIRC, that Incobrasa soy meal traffic leaves Gilman in 286K cars.

bn13814

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Re: New Plant at Reynolds
« Reply #13 on: November 27, 2012, 04:30:08 PM »
If it is like "sand", you would think it would be loaded into 2 bays like sand service cars. Those are heavy little guys. The Monon is used to those already with all the sand and concrete 2 bays going back and forth.  If the GW gets it, good for them. I would prefer the Monon  though because its in my front yard  :P :P

Until the early 1980s, TP&W handled a lot of loaded twin-bay sand cars in both directions. One of 'em even caused the Crescent City wreck of June 21, 1970! Lots of eastbound BN-TPW-CR and RI-TPW-CR routings plus SW Michigan sand for the Caterpillar foundry in Mapleton (routed Chessie-CR-TPW I think).

IMHO, CSXT probably has a better chance of getting this traffic, but I can see a BNSF-TPW routing for inbound traffic and CSXT for outbound traffic to AK Steel in Ohio. 

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Re: New Plant at Reynolds
« Reply #14 on: November 27, 2012, 06:39:49 PM »
As a metallurgical engineer, I must admit to being totally confused on what this plant will do and what the feedstock actually is. Historically, hematite ore was dug out  of the ground and shipped. The lower grade stuff, taconite, was ignored until concentration methods made it  feasible to use . Taconite was pellets from day 1. Hematite was pelletized to some extent, once the blast furnace operators found pellets advantageous to use (fines in the native hematite ore tend to be blown out of the furnace, reducing the yield). There has always been interest in a direct reduction process, to skip the blast furnace route and come up with an iron product that could be used in an electric furnace. Steel Dynamics' mill in Pittsboro was orignally built with the idea of using a direct reduced product, iron carbide. There was also a direct reduction plant planned for the Minnesota iron range that would produce iron carbide. With the current low price of natural gas, some of these schemes may make economic sense. A gas fired reducing atmosphere furnace would heat iron ore and start the process to reduce the oxide to iron. If the furnace atmosphere is made much richer (i.e. higher carbon), then the ore can  be reacted to make iron carbide, which I understand, can be melted in an electric furnace. Once the direct reduced iron or iron carbide is produced, it could be "pelletized" by compacting and sintering. Such a product could conceivably be used in either a blast furnace or electric furnace. So why do this so far from the mines? It may be possible that the ore concentration plants do not have enough capacity and this would be a way to   get around that bottleneck. Of course, all of this is moot if the steel demand turns down in the next couple of years.

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Re: New Plant at Reynolds
« Reply #15 on: November 27, 2012, 06:53:27 PM »
After thinking about this some more, it is possible that the plant will process stuff like mill scale (iron oxide). The integrated mills with blast furnaces historically just put mill scale back in to the metal charge. However, the mini mills (electric melting) don't have a good way to use such waste. The plant could possibly also process iron oxide fines from such sources like bag  house dust and grinding swarf.

CSX_CO

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Re: New Plant at Reynolds
« Reply #16 on: November 27, 2012, 07:50:21 PM »
After thinking about this some more, it is possible that the plant will process stuff like mill scale (iron oxide). The integrated mills with blast furnaces historically just put mill scale back in to the metal charge. However, the mini mills (electric melting) don't have a good way to use such waste. The plant could possibly also process iron oxide fines from such sources like bag  house dust and grinding swarf.

If you're right, then that makes Reynolds a good location to tap the various mills in the area.  Not too far of a drive from Nucor, SDI's various mills, and the mills along Lake Michigan.  Throw in the traffic from Minnesota, and the location makes a bit more sense.

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Re: New Plant at Reynolds
« Reply #17 on: November 27, 2012, 08:09:19 PM »
Hmmm, well this must have been the TPW traffic that was spoken of.  Well Scrap, if that is the case, that is 1 down, now 2 more shoe's to drop.   ;D

IndyKing

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Re: New Plant at Reynolds
« Reply #18 on: November 27, 2012, 08:21:26 PM »
Would this black sand be any heavier than coal?
As far as density goes, yes, much heavier than coal per unit volume.  The hematite is concentrated away from unwanted mine rock by density separation in a bentonite bath, where unwanted rock floats and the hematite drops to the bottom.

If it is like "sand", you would think it would be loaded into 2 bays like sand service cars.
I was thinking that it would be carried in something like ore jennies, or coal cars that are only 1/3 or 1/2 fully loaded.
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scraphauler

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Re: New Plant at Reynolds
« Reply #19 on: November 27, 2012, 09:38:54 PM »
Minnesota press outlets report disappointment in plant coming to Indiana.  Quote from the Minneapolis/St Paul Business Journal:

"Minnesota and Iron Range officials have long been frustrated with Magnetation in their efforts to have the facility built in Minnesota. The state passed laws to make it easier for the project to get started, and the company received $1 million in grants and loans from the state.  But the company said earlier this year that Minnesota was out of the running for various cost and regulatory reasons."

Per their websight, MagCon (Their Brand Name) Hematite Concentrates are produced from natural ore fine tailings and lean ore stockpiles in northern Minnesota and are are very low in impurities, such as Phosphorous and Sulfur.
 
As for customer base, Magnetation LLC (who is building plant) was formed in Oct 2011 and is a joint venture between Magnetation Inc (50.1% owner) and AK Steel (49.9% owner) for the sole purpose of expanding MagCon production capacity and building a 3M mt/yr flux pellet plant to supply AK Steel.

So, while they may end up selling into the open market, it appears this plant is expressly for AK Steel.  As for how material will move, at 65% Fe, Magcon might not need to stay dry and could ship in open top hoppers unlike DRI which has to stay covered and dry (unless briquetted into HBI).

Hmmm, well this must have been the TPW traffic that was spoken of.  Well Scrap, if that is the case, that is 1 down, now 2 more shoe's to drop.   ;D

Kinda what I'm thinking.....
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