Mining company cleveland-cliffs of the U.S. and joint-venture partner Kobe Steel of Japan will construct a commercial-scale iron nugget production facility at the Empire Mine in Michigan's Upper Peninsula. Production of the 500,000 ton-year plant is expected to begin commercial operation by early 2010.

The new facility in Palmer, Mich., will use Kobe's patented ITmk3 ironmaking technology under a 10-year alliance agreement. This process will produce high-purity iron nuggets containing more than 96% iron. The Empire Mine currently produces iron ore pellets that contain 65% iron and are used as a feed in blast furnaces to produce pig iron. By using the Kobe process, however, the blast furnace process is bypassed, and high-quality nuggets can be fed—much like ferrous scrap—into an electric arc furnace.

Joseph Carrabba, CEO of Cleveland-based Cleveland-Cliffs, says the iron nuggets from the new facility will be used as a raw material feed by the North American mini-mills, which use electric-arc furnaces instead of blast furnaces to melt pig iron or scrap steel to produce liquid steel.