CSX to Begin Shipping Iron Ore to Lorain Steel Mill

CSX plans to begin shipping iron ore to a plant in Lorain, Ohio, that will turn it into pig iron.

Republic Steel and ERP Iron Ore LLC said they have reached a memorandum of understanding by which the iron ore will move by rail to Lorain from a pellet plant in Reynolds, Indiana.

Republic owns the steel mill in Lorain and ERP owns the Indiana facility.

Once the Lorain operation is fully operational, Republic expects to produce up to one million net tons of pig iron per annum that will be used to produce steel for electric arc furnaces.

American pig iron production has fallen in recent years due to competition from imports from Brazil, Russia and the Ukraine.

ERP noted that electric arc furnaces are displacing traditional blast furnaces.

Last January, ERP acquired the Indiana plant by buying the the assets of Magnetation LLC. Founded in 2006 in Grand Rapids, Minnesota, Magnetation used technology it developed to extract iron ore concentrate from old mine waste-sites on Minnesota’s Mesabi Range.

It opened the $400 million Indiana plant in 2014 to supply AK Steel.

The iron ore travels to Reynolds via a 120-car train of concentrate from Minnesota to Chicago on BNSF. CSX then transports the ore to Reynolds.

CSX also moves trains of finished pellets to AK Steel facilities in Ohio and Kentucky.

After the open market iron ore business collapsed in 2014, Magnetation filed for bankruptcy protection and closed its Minnesota and Indiana facilities in late 2016.

ERP was founded by Tom Clarke of Roanoke, Virginia, who as an entrepreneur made his first millions in the health care industry.

He later became an environmental activist and founded ERP and Chippewa Capital Partners.

Clarke has also acquired financially distressed or bankrupt coal mines, which he said he will make environmentally responsible despite the vast amounts of carbon dioxide released when coal is burned.

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