From: Beth Havlik

To: George Pruchnofski ; Aagenes, Jason D.

Cc: Erik Boleman
Subject: RE: DRAFT STS report

Date: Wednesday, June 27, 2007 6:15:07 PM

As George pointed out, the STS design is for replacement of the existing scrubber with a mechanical collector and new venturi rod scrubbers constructed of materials that will withstand the operating chemistry (lime). While this is different from the secondary wet scrubber option that Barr included, a comparison to the calculations submitted with the BART report can be made. My observations are as

follows:

Many utility costs and assumptions are identical to those used in our calculations. Labor rates, water, compressed air, lime, expected utilization rate, the retrofit factor, and others. The agreement with the lime cost is notable, because Dick Cordes used a lower number that he got from a vendor in his

calculations. STS’s use of the same lime cost as we used supports use of our lime cost, not Dick’s.

The stack parameters STS used are somewhat lower than we used. STS used a flow rate of 600,000
acfm, whereas we used 726,000 acfm. We used measured values from past stack tests for stack flow rates, temperature, and moisture content. The overall difference in the standard dry cubic feet per minute results in their flow rate being about 12% lower than the flow rate we calculated. Since the equipment is sized based on flow rate, we would expect the equipment costs calculated by STS to be correspondingly low.

STS appears to have used a slightly lower maximum 24-hour emission rate of 336 lb/hr. We used 375

lb/hr. This would have a minor impact on operating costs, but no impact on capital costs because the equipment is sized based on flow rate.

Treatment of the scrubbing liquor is provided using settling and filtration. No other water treatment is provided. As we have previously noted, questions about the water discharge quality will need to be understood prior to going down the path of adding an additional SO 2 scrubber. Increased sulfate is a
water quality issue that needs to be considered for the tailings basin seepage because there is a wild rice water quality standard of 10 mg/l sulfate. There is also a sulfate aquatic toxicity moving-standard

based on hardness. Further, the MPCA alleges that sulfate increases methylation of mercury. Methylated mercury is believed to be readily absorbed by fish. There is no mercury TMDL for the St

Louis River , so an increase in sulfate in the seeps may be banned as an expanded discharge related to current exceedences of mercury fish tissue standards. Finally, there are other water quality standards that need to be addressed including protection of wetlands for non-degradation and as well

as miscellaneous others.

The overall resulting SO 2 control efficiency STS used was 50%. We had assumed the efficiency of
the secondary scrubber to be 60%. Their efficiency is conservatively low, and works in your favor.

We can discuss further tomorrow.

Beth

From: George Pruchnofski

Sent: Tuesday, June 26, 2007 4:49 PM

To: 'Aagenes, Jason D.'

Cc: Beth Havlik Subject: RE: DRAFT STS report

I just read the text and the $/ton removed cost at the end of the spreadsheet and I feel pretty good. Beth is looking at the costs in more detail. A few points:1. For the BART analysis last year we decided to add a 2nd scrubber in series in a new location because (a) leaving the existing scrubber in place for initial particulate removal added no addional cost while replacing with a multiclone like STS is proposing adds to the capital costs and (b) both STS and we concluded that the existing location could not accomidate the equipment needed.

2. I also like that STS concluded that you just can't add lime to the existing system because it would result in operational issues so they did not even evaluate this alternative in detail. This is consistent with what we were thinking last year for the BART analysis so we did not even evaluate this option.

3. I like the $/ton removal cost - on the order of $20,000. Our BART analysis was based on a different design configuration, etc and the $/ton removed were lower in the BART analysis so I think this should show MPCA that we were not trying to jack up the costs like they seem to have perceived.

I will look at this in more detail in the AM.

By the way, when is a good time for you to have a conference call tomorrow- to catch up on everything. Does 9:00 AM work for you?

From: Aagenes, Jason D. [mailto:JDAagenes@cleveland-cliffs.com]

Sent: Tuesday, June 26, 2007 4:09 PM

To: Beth Havlik; George Pruchnofski ; Erik Boleman ; Paul Taylor ; Dostal, Thomas C.; Davis, Todd E.

Cc: Skolasinski, Dave Z.; Roth, Todd D. Subject: FW: DRAFT STS report Importance: High

All, MPCA hired STS to perform a more detailed cost analysis of installing a second scrubber on Line 2 for SO2 control as part of BART. They’ve given us a lot of time to review the draft – by tomorrow. Please take a quick read through and let me know if you have any comments or concerns ASAP.

Tom Dostal, Please forward this information to Jardar and see if they have any comments.
Thanks,

Jason

From: Fenske, Mary Jean [mailto: Mary.Jean.Fenske@state.mn.us ]

Sent: Tuesday, June 26, 2007 1:11 PM

To: Aagenes, Jason D.

Cc: Seltz, John; Jackson, Anne; Taylor, Hal Subject: DRAFT STS report

Jason, Here is the draft report from Hal Taylor at STS. We are currently reviewing and assembling our comments. If you see any issues with the assumptions used, please comment directly to the MPCA (by tomorrow if possible).

You will receive a comment of the final report and you can provide more detailed comments on that product as well, if you choose .

<<UTAC Cost Analysis SpreadsheetSO2 STSHWTDraft 5 30 07.xls>> <<STS UTAC costanalysis.doc>>

Thanks Jason. Mary Jean

Mary Jean Fenske, P.E.
Minnesota Pollution Control Agency

520 Lafayette Road N.

St. Paul

, MN 55155
(651) 297-5472 e-mail: mary.jean.fenske@pca.state.mn.us

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