Re: Cost of Nugets

From: Russ
Location: Las Vegas
Email: COGIT8R@aol.com
Remote Name: 198.81.26.10
Date: 07/30/04
Time: 03:56:37 PM

Comments

There are other issues besides the percent iron. At Northshore Mining, the ore is crushed, processed in a series of rod mills and ball mills, and the iron is magnetically separated to produce a pellet that is 62 percent iron and 38 percent silicates. In order to produce one ton of iron, the mill must buy and ship 1.6 tons of pellets. In addition, the mill must buy and ship limestone and coke in order to further remove the silicates and produce iron. This extra cost of ore processing would be transferred to the nugget facility which explains the higher cost of nuggest. If a facility were to use nuggets, they would only have to ship 1.05 tons of nuggets to produce one ton of iron and they would have to buy, ship, and use lesser quantities of other raw materials to refine the nugget into iron. A considerable portion, perhaps all, of the 500 percent you mentioned is already being incurred by blast furnace operators due to increased shipping costs of raw materials and the increased cost of operating the blast furnace to refine the taconite. The increased costs of higher quality nuggets would be offset by reduced costs of purchasing and shipping raw materials and reduced costs of refining nuggets vs taconite.