East Toledo iron plant on track to open next summer

Cleveland-Cliffs Inc. COO says employees are already in training; Plant slated to be making 1.9 million tons of briquettes annually by 2021.

By Jon Chavez / The Blade
Thu, 10 Oct 2019 00:05:28 GMT

Ten days ago workers finished erecting the 457-foot furnace reactor tower at the hot briquette iron manufacturing plant under construction in East Toledo, officially making it the tallest structure in the city.

So on Wednesday, the plant’s owner, Cleveland-Cliffs Inc., decided it was time to provide a progress update on the $830 million plant by holding an hour-long open house downtown at the Toledo-Lucas County Port Authority offices.

Clifford Smith, the company’s executive vice president and chief operating officer, said the project is on schedule and expects to be making its first iron briquettes by June. It hopes to ramp up production quickly to be making 1.9 million tons of briquettes annually by 2021.

“We have 60 employees now in training,” Mr. Smith said. Those are plant operators, but fairly soon it will hire another 100 workers to physically run the plant.

A few weeks ago, the construction force that has been building the briquette plant since April, 2018 peaked at 1,100. It is now at just under 1,000 but those numbers will continue to dwindle as the plant moves closer to completion.

“We are excited. This has been a journey since we started looking at this in 2014,” Mr. Smith said. Cleveland-Cliffs, which is based in Cleveland, eventually will spend over $1 billion on the project that includes a redevelopment of a mine in Minnesota to provide the Toledo plant with iron pellets that have silicon in them.

To date, it has spent $500 million building the Toledo plant.

Toledo Mayor Wade Kapszukiewicz attended the open house and called the briquette plant “the most exciting economic project that has come to Toledo in the last five years.”

The project already has changed the face of Toledo by building the tallest structure, a title until Sept. 30 was held by the Fifth Third Center building on Summit Street.

“On every metric this project has exceeded expectations — and it was already fantastic,” the mayor said.

Mr. Smith said once Cleveland-Cliffs, which has until now always confined its business to mining and making iron ore pellets for use by the electric-arc furnace steel industry, decided to get into the hot briquetted iron business, Toledo was always its preferred location for the plant.

It iron boat fleet can use the Great Lakes to transport pellets, and Toledo has rail and interstate to transport finished briquettes. Plus, Toledo is very close to several electric-arc furnace steel mills.

“We are already in contract negotiations with several steel companies who are interested in the product,” Mr. Smith said.

Hot briquetted iron, known as HBI, is a supplement that when combined with scrap iron, makes a premium grade of steel. HBI is made from iron ore pellets that are heated and condensed by extracting the oxygen in them. The finished briquettes are about 4 inches but extremely heavy and are about 90 percent iron.

Hot briquetted iron needs less energy to be turned into steel.

A Cleveland-Cliffs official said the HBI process actually was developed in Toledo years ago, but because of the high cost of natural gas it has never been economically practical in the United States. With cheaper natural gas now available because of fracking, HBI is now affordable, the official said.

Steel makers that now want hot briquetted iron must get it from overseas, primarily Russia and the Middle East. But because of transportation costs it is expensive.

Mr. Smith said Cleveland-Cliffs, which tried and failed to develop an HBI plant in 2000, saw the price of natural gas plummeting 10 years ago it began rethinking the idea.

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