Speaking at the 32nd annual Steel Survival Strategies conference in New York, N.Y., USA, Goncalves said the US$70 million project is designed to reduce silica content of the pellets being produced at its Northshore Mining operation in Silver Bay, Minn. 

Goncalves said that through the project, Cliffs will install a dedicated line for low-silica pellets, ensuring a more stable production flow.  

From the sidelines of the conference, Clifford T. Smith, executive vice president for business development, said the project will progress in parallel with the HBI plant. Engineering has begun, he said, and the new equipment will be started up to coincidence with the opening of the HBI plant. 

Cliffs revealed the location for the $US700 million plant earlier this month, saying it had chosen a plot of land along the Maumee River in Toledo, Ohio, near the southwestern shores of Lake Erie. The plant is being designed to produce 1.6 million tons annually and is to enter production in 2020. 

Goncalves told conference attendees that the target market for the plant’s output is the electric arc furnaces in the Great Lakes region. Cliffs also could barge briquettes through the Great Lakes and down the Mississippi Rivers to southern EAF operators, he said, although the transportation costs would reduce some of the cost advantages that the northern operators will enjoy.