June 4, 2009

United States Steel Corporation

600 Grant Street Pittsburgh, PA 15219

Attention: Mr. Alex Parou Cap Ex Buyer

Subject: USS Minntac Pelletizing Plant NOx Reduction Project

Reference: USS Specification UMO-0486-1 Aker Technical Services Proposal A19904

Dear Mr. Parou,

Aker Technical Services, a division of Aker Metals Inc., part of Aker Solutions, is pleased to provide this proposal to United States Steel in response to the subject USS specification. The concept envisioned by USS to accomplish the NOx reduction, as described in specification UMO-0486-1, involves the installation of an emission control system on each of the five (5) indurating lines. Aker Solutions, in conjunction with Fives North American and Metso Minerals, are proposing an alternate solution, specifically, achieving the reduction tar get by reducing the amount of NOx produced at the

burners.

Aker Solutions, Fives North American and Metso Minerals believe that application of Low NOx Burners to the kilns at Minntac is the most cost effective way to achieve the required reduction. The attached table shows a relative comparison of operating and capital costs for three NOx reduction processes. Each process was sized to remove 70% of the NOx (9,310 tons per year of NOx ) from

the five kilns at USS Minntac. Low NO

x Burners refers to the option proposed by Aker Solutions, Fives North American, and Metso Minerals to reduc e NOx production during combustion. SCR refers to the use of Selective Catalytic Reduction to c onvert NOx to nitrogen and water vapor by reacting it

with ammonia. The LoTO

x TM option reacts ozone with the NOx to form the nitric acid precursor, N 2 O 5

. This compound is readily absorbed in water as nitric acid which then can be neutralized. The operating costs include an allowance for wastewater treatment.

The Low NO

x Burner capital costs were developed by Aker Solutions and can be considered budgetary. They are based on current labor rates and recent quotations for major equipment. The operating costs were calculated using typical long term unit costs for natural gas and power. Costs are calculated for five (5) kilns. All kilns were assumed to have identical emissions and heat input.

The SCR capital and operating costs were calculated fr om the ‘EPA Air Pollutions Control Cost Manual’, Jan. 2002. Costs were updated to 2009 using ‘Chemical Engineering Plant Cost Index, May 2009’.

The LoTO

x TM costs were estimated using information from a BACT Cost Table produced for MN Steel Industries Air Quality Permit Application.

The analysis shows that the Low NOx Burners would provide the most economical approach to reducing nitrous oxides at the USS Minntac facility. The LoTO

x TM system was found to be the most expensive method for reducing nitrous oxides.

Aker Technical Services, a division of Aker Metals Inc. © 2008 Aker Solutions 701 Technology Drive Canonsburg, PA 15317

Tel +1 724 416 6900 www.akersolutions.comThe conclusion is consistent with other studies that combustion controls are typically the most cost effective. Post combustion methods are typically selected after options for combustion control have been implemented but are not able to meet the final emission limits.

Some additional advantages and disadvantages are listed in the lower part of the attached table. Aker Solutions and our partners encourage a discussion of these and other issues before making a final

selection.

Aker Solutions sincerely appreciates this opportunity to be of service to U. S. Steel. We look forward to the possibility of renewing the relationship between our organizations.

Any questions or comments you may have relative to this proposal can be referred to me at 724-416-

6838.

Very truly yours,

David G. Sweitzer Director – Business Development

Aker Solutions
dave.sweitzer@akersolutions.com

cc: Mr. Tom Robertson, Fives North American- 1 - 

# MINNTAC PELLETIZING PLANT

NOx Reduction Project



# United States Steel Corporation Minnesota Ore Operations

Mount Iron, Minnesota

June 2009

part of AkerTABLE: NOx Reduction Process Cost Comparison for USS Minntac

Variable/System Low Nox

Burners SCR LoTOxTM Comment Capital Cost $34,500,000 $40,000,000 $68,000,000

Operating Cost, Annual

Maintenance 1,035,000 1,200,000 2,000,000 Power 900,000 2,000,000 7,400,000 $0.05 per kw-hr Natural Gas 3,300,000 0 0 $7 per M BTU Oxygen 0 0 8,200,000 $50 per ton O2

Ammonia 0 2,200,000 0 $400 per ton

NH 3 Catalyst Replacement 1,300,000

Wastewater Treatment 0 0 2,300,000

Cost of capital 4,800,000 5,500,000 7,400,000 5% interest, 15

yr Total Annual Operating 10,035,000 12,200,000 27,300,000

Cost per ton Nox Removed $1,100 $1,300 $2,900

Advantages/Disadvantages

Area Requirement Minimal, space for fan at grade near product end of kiln Difficult to fit

reactor before

exhaust

scrubber Difficult to fit

reactor before

exhaust scrubber

Performance Nox reduction

maintained throughout life of

burners Nox reduction

declines with catalyst age; pressure drop may increase due to plugging Nox reduction

maintained through life of

reactor

Other Pollutants None Ammonia slip,

additional

sulfuric acid mist Wastewater

treatment of nitrogen compounds

Other Hazards None, no new

reactants or fuels Storage and handling of

ammonia and waste catalyst Handling oxygen,

ozone, wastewater,

water treatment

chemicalsAker Solutions Proposal No. A19904 Minntac Pelletizing Plant Table of Contents June 2009 NOx Reduction Project Page 1 United States Steel Corporation 

## Table of Contents

PROJECT OVERVIEW................................................................................................................. Section 1

PROCESS FUNCTIONAL DESCRIPTION................................................................................... Section 2

PROCESS FLOW DIAGRAM ....................................................................................................... Sect ion 3

GENERAL ARRANGEMENT DRAWINGS................................................................................... Section 4

CAPITAL COST ESTIMATE......................................................................................................... S ection 5

COMMERCIAL OFFER............................................................................................................... .. Section 6

CLARIFICATIONS ................................................................................................................. ....... Section 7Aker Solutions Proposal No. A19904 Minntac Pelletizing Plant Section 1 June 2009 NOx Reduction Project Page 1 United States Steel Corporation 

## Section 1

PROJECT OVERVIEW

Background

The U. S. Steel (USS) pelletizing plant known as Minntac is located in northern Minnesota. The plant, built by Allis-Chalmers (now part of Metso Minerals), uses the grate-kiln pelletizing process. There are three separate processing sections of the plant. Green pellets are dried and preheated on a traveling grate section and then discharged into a rotary kiln where they are fired at a high temperature. Hot fired pellets are dropped into a circular cooler from the discharge end of the kiln. A single large burner located at the discharge end of the kiln provides most of the heat input. At Minntac, the burner can fire natural gas, fuel oil, coal, and biomass, which comes fr om logging/sawmills. As part of a permit renewal application for the state of Minnesota, Minntac must decrease their NOx emissions by 70%.



### Design Concept

The concept envisioned by USS to accomplish the NO x reduction, as described in specification UMO0486-1, involves the installation of an emission control system on each of the five (5) indurating lines. Aker Solutions, in conjunction with Fives North American (FNAC) and Metso Minerals (Metso), are proposing an alternate solution, specifically, achiev ing the reduction target by reducing the amount of NOx produced at the burners.

The design presented in this proposal will take hot combustion air from the last section of the cooler hood and premix it with natural gas in six mixer tube s arranged in a partial symmetrical pattern around the existing multifuel burner. The new premix mixer tubes will provide approximately 50% of the total fuel input using natural gas. The existing burner will provide the remaining fuel input using coal and biomass. The natural gas flow will be set in the new mixer tubes and the solid fuel feed rate to the existing burner will provide the final temperature control. The new equipment will control the total air-fuel ratio to minimize overall NOx production.

The implementation approach envisioned in the USS specification involved a pilot scale installation to verify the effectiveness of the concept prior to full implementation. A pilot scale installation of a low NOx burner solution as proposed herein is not practical and therefore is not proposed. However, development engineering for the low NOx burner system does incl ude bench scale laboratory work by FNAC to develop the burner system design.

Since this is essentially a developmental engineeri ng project, Aker Solutions / Metso / FNAC envision that following installation of the low NOx burner system on the first indurating line, a period of testing and optimization will ensue that will allow for further improv ements in the design prior to its installation on the remaining four (4) indurating lines.

For purposes of this proposal we have assumed that the initial installation will be on line #7.Aker Solutions Proposal No. A19904 Minntac Pelletizing Plant Section 1 June 2009 NOx Reduction Project Page 2 United States Steel Corporation 

### Scope of Work and Execution Plan

Aker Solutions is proposing to enter into a contract with USS to assist USS with the complete development, design, installation, testing and optimization of the low NOx burner system as further described below. Aker Solutions will subcontract portions of the engineering to Metso and FNAC and will be responsible for coordinating the activities of Mets o and FNAC. By contracting in this manner, USS will have a single point of contact and clear lines of accountability.

The proposed project execution can be thought of as occurring in two phases based on the nature of the

activities as follows:

Phase 1 – Development Engineering

Aker Solutions will contract with FNAC to provide development engineering for the proposed low NOx burner system which would include:

 A site visit to Minntac by FNAC personnel to better understand operating conditions and CEMS

data

 Bench scale laboratory work

 Development of resulting system schematics

Aker Solutions will contract with Metso to pr ovide the following development engineering services:

 A site visit to Minntac by two (2) Metso process personnel and two (2) Metso mechanical advisers

 A process simulation entailing Metso’s standard heat and mass balance for the traveling grate system reflecting the current operating conditions of line #7

 A process simulation entailing Metso’s standard heat and mass balance for the traveling grate system reflecting the anticipated operating conditions of line #7 after the addition of the low NOx burner system

In conjunction with the development activities under taken by FNAC and Metso, Aker Solutions will provide overall Process Engineering which will include:

 Process flow diagram with material balance

 Piping and instrumentation diagram

 Process safety review

 Process data sheets

 Detailed process description

Aker Solutions personnel will visit Minntac to meet with USS Engineering and Operations personnel to gather technical information necessary for the devel opment of the construction engineering deliverables needed to install the low NOx burner system.

Based on the results of the above, FNAC will provide a proposal to USS for the detail design and supply of the low NOx burner system. This offer will include:

 Low NOx Lean Pre-Mixers (6)

 Associated control valves and instrumentation

 Control system for Low NOx Lean Pre-MixersAker Solutions Proposal No. A19904 Minntac Pelletizing Plant Section 1 June 2009 NOx Reduction Project Page 3 United States Steel Corporation Aker Solutions will refine the preliminary capital cost estimate and implementation schedule.

Phase II – Construction Engineering, Installation, Testing and Optimization

Following USS’ review of the Development Engineering and authorization to proceed, the project will progress into Phase II which includes:

Aker Solutions will contract with Metso to provide the following engineering services:

 Outline drawings of the demolition required to the existing firing hood area to perform

modifications

 Layout drawings of the modified firing hood to reflect the new burner configuration

 Detailed fabrication drawings of the necessary modifications to the firing hood

 Refractory outline drawings reflecting the new modifications

Aker Solutions will proceed with development of the construction engineering deliverables needed to install the low NOx burner system. The anticipated deliverables include:

Mechanical Engineering

 General Arrangement Drawings

 Demolition Drawings or Sketches

 Ductwork Design Drawings

 Ductwork Stress Analysis

 Specifications and requisitions:

- Combustion air fan with turning gear

- Ductwork fabrication

- Dampers and expansions joints

- Refractory

Piping Engineering

 Material, fabrication, testing and cleaning specifications

 Piping line index

 Routing diagrams

 Orthographic or isometric drawings

Electrical Engineering

 Specification and requisitions:

- Motor Control Center (1 medium voltage and 1 low voltage starter)

 Device location drawings / physical drawings

 Conduit and cable schedule

Instrumentation and Control System Engineering

 Instrument index

 Functional Description

 Logic Diagrams as required

 Configuration Diagram

 Specifications and requisitions for field instruments

 Installation and wiring diagramsAker Solutions Proposal No. A19904 Minntac Pelletizing Plant Section 1 June 2009 NOx Reduction Project Page 4 United States Steel Corporation Civil / Structural Engineering

 Foundation Drawing

- Combustion air fan

 Structural Drawings

- Ductwork support

- Platforms and access

- Valve stand support

 Various installation specifications

Aker Solutions propose to provide purchasing services as agents for USS to assist USS in procurement of all equipment (including the FNAC low NOx burner s ystem), fabrications, and construction services needed to construct the facility. In this manner, all warranties and other obligations of the suppliers will flow directly to USS and USS will have direct payment obligation to the suppliers. USS can be involved in the procurement process to whatever extent desir ed. Typically, we would expect USS to be involved in developing or approving bidders lists, and reviewing / approving quotations analyses prior to purchase order placement. Aker Solutions will work with USS to develop an appropriate set of procurement documents and procedures for the project.

Aker Solutions will work with USS to develop a construction contracting plan that takes maximum advantage of the capabilities of the local contractors and fosters as much competition in bidding as possible. The construction contracts will include supply of all bulk materials.

Aker Solutions assumes that one contractor, or perhaps a third party, will serve as the site manager and therefore have not included construction management se rvices. Aker Solutions will provide technical personnel to assist the contractors.

Aker Solutions will provide overall project management and coordination, including scheduling, cost control, and development of project procedures.

Aker Solutions, FNAC, and Metso will provide personnel to participate in the testing and optimization phase following installation and start-up of the new facilities.

The following diagram depicts the proposed contractual arrangement.MINNTAC LOW NOx PROJECTA19904-00ContractorsAker SolutionsMetsoFNAC•Low NOx Technology•Burner Supply•Burner Controls / Logic•Combustion Schematic•Start-up / OperationalAssistance•Process Evaluation•Firing Hood Modification Design•Development Engineering forBurner Installation•Construction Engineering•Technical Specifications /Requisitions for Aux. Equipment(non-FNAC)•Procurement Services•Overall Project ManagementUSS MINNTAC•All Demolition and NewConstruction•Supply of Bulk Materials•Site ManagementAker Solutions Proposal No. A19904 Minntac Pelletizing Plant Section 2 June 2009 NOx Reduction Project Page 1 United States Steel Corporation 

## Section 2

PROCESS FUNCTIONAL DESCRIPTION

Reduction of NOx emissions at the source can be accomplished by reducing the local temperature, reducing the local oxygen level, and minimizing the residence time at temperature. Fives North American Corporation (FNAC) has over 400 installations worl dwide, including a dozen rotary kilns that use Low NOx LE technology in a variety of industries such as petrochemical, consumer products, and light and heavy industrial.

Aker Solutions and FNAC are jointly working on the application of Low NOx LE technology to the iron ore pelletizing process. In the current iron ore indurating processes, hot recuperated gases from the cooling section are recirculated to the firing section. The hot recuperated gas is heated from ~1600°F to ~2400°F with a conventional burner or burners designed for high fuel efficiency. However, the optimum conditions for the process and for fuel efficiency result in high NOx generation. Low NOx LE technology employs lower peak flame temperature, lower oxygen content near the flame, and fuel staging and rapid mixing for short residence times. Current LE technology utilizes a premix of natural gas and combustion air. Minntac needs to retain the operational flexibility to use natural gas, fuel oil, and solid fuels. In addition, the available space in the firing hood of the kiln does not allow for the installation of a complete LE burner with sufficient capacity for full production. Therefore, the concept of the project is to blend LE technology from FNAC with the existing multi-fuel combustion system.

Six (6) lean premix mixer tubes will be located in a partial symmetrical pattern around the existing Aecometric burner. The mixer tubes will be angled inward toward the flame from the Aecometric burner. The mixer tubes will be sized to provide approximately 50% of the total required fuel input with the remainder coming from the existing burner. Four mixer tubes will be capable of producing 30 x 10 6
BTU/hr. Space limitations will restrict the two remaining mixer tubes to 19 x 10 6 BTU/hr. The inlet end of the larger mixer will have a 30” diameter combusti on air connection that will transition down to 16” diameter at the discharge end at the kiln firing hood. The smaller mixer will have a 24” diameter

combustion air inlet that will transition down to 12” diam eter at the discharge end at the kiln firing hood. A precisely controlled fuel-air ratio in the mixer tubes creates a uniform, thermo-chemical environment where flame temperature is tightly controlled (<2700°F) and NOx emissions are minimized. The combustion products from these mixing elements combine with the raw fuel from the burner, buffering the reaction with the highly preheated cooler air, again controlling flame temperature and minimizing NOx production from the primary burner. Rapid mixing and high velocity through the mixer tubes, ~270 feet per second, results in short residence time.

The combustion air component of the premix will be ~700°F to minimize the effect on fuel consumption.

The hot combustion air will be recovered from the cooler vent stack. No dust collection will be required since the cooler vent gas is a clean air stream. A bl eed-in air damper will be used to maintain the desired temperature. Both combustion air and natural gas flows will be measured and controlled on each mixer tube. Downstream of the combustion air fan, the ductwork will split into two branches, one down each side of the kiln. Each branch will then split into three individual ducts to service two groups (east and west) with three mixers each. No pilot burners will be used so the kiln will start up using the existing burner. When the temperature in the kiln is above the auto-ignition point for natural gas, the mixer tubes can be brought on line and the existing burner cut back.

Refer to the process flow diagram for the LE technology concept in Section 3. .Aker Solutions Proposal No. A19904 Minntac Pelletizing Plant Section 2 June 2009 NOx Reduction Project Page 2 United States Steel Corporation The following figures show the approximate location for the premix mixer tubes at the discharge of the kiln. To fit the bottom mixer tubes in, it will be necessary to modify the firing hood by notching the center section of the sloping roof and making the center roof area horizontal (Figures 2 and 5).



### FIGURE 1



# Minntac Low NOx Lean Premix Concept

Tentative locations for six mixers

Ø 234.00in. Existing four-fuel burner

Ø 28.00in.Aker Solutions Proposal No. A19904 Minntac Pelletizing Plant Section 2 June 2009 NOx Reduction Project Page 3 United States Steel Corporation 

### FIGURE 2



## Minntac Low NOx Lean Premix Concept

Side Section Sketch Showing Proposed Locations of Front

of Firing Hood, Existing Burner, and Lower New Mixers

Existing Burner

New MixerAker Solutions Proposal No. A19904 Minntac Pelletizing Plant Section 2 June 2009 NOx Reduction Project Page 4 United States Steel Corporation 

### FIGURE 3



## Minntac Low NOx Lean Premix Concept

Side Section Sketch Showing Proposed Locations of Front

of Firing Hood, Existing Burner, And New Inner Side

Mixers

N e w M i x e r Existing Burner N e w M i x e r Existing BurnerAker Solutions Proposal No. A19904 Minntac Pelletizing Plant Section 2 June 2009 NOx Reduction Project Page 5 United States Steel Corporation 

### FIGURE 4



## Minntac Low NOx Lean Premix Concept

Side Section Sketch Showing Proposed Locations of Front of

Firing Hood, Existing Burner, And New Outer Side Mixers

Existing Burner New MixerAker Solutions Proposal No. A19904 Minntac Pelletizing Plant Section 2 June 2009 NOx Reduction Project Page 6 United States Steel Corporation 

### FIGURE 5



## Minntac Low NOx Lean Premix Concept

Front View (from Kiln) Showing Possible Modifications

of Firing Hood

Ø 234.00in. Existing four-fuel burner

63.00in.Aker Solutions Proposal No. A19904 Minntac Pelletizing Plant Section 2 June 2009 NOx Reduction Project Page 7 United States Steel Corporation To protect the end of the mixer body, a ceramic insert at the outlet end of the mixer tube may be necessary as shown below in Figure 6. The high exit velocity of the premix results in a flame liftoff region between 2 1⁄2 to 5 feet from the end of the mixer tube before the flame begins.



### FIGURE 6



# Minntac Low NOx Lean Premix Concept Typical Mixer Construction and Flame Geometry

Max. 168 Flame Length

2 x d < l < 4 x d Flame Liftoff region

2 x d

Flame Diameter d = 15.64 140

Ceramic Insert

Burner Wall Mixer BodyAker Solutions Proposal No. A19904 Minntac Pelletizing Plant Section 3 June 2009 NOx Reduction Project Page 1 United States Steel Corporation 

## Section 3 PROCESS FLOW DIAGRAM (PFD)

The following preliminary Process Flow Diagram is included with this proposal for reference.

Revision

R-05-01 Low NOx Mixer Tubes A

This diagram identifies the process flow streams for the Low NOx Mixer Tubes.Aker Solutions Proposal No. A19904 Minntac Pelletizing Plant Section 4 June 2009 NOx Reduction Project Page 1 United States Steel Corporation 

## Section 4

GENERAL ARRANGEMENT DRAWINGS

The following preliminary General Arrangement Drawings are included with this proposal for reference.

Revision

G-00-201 General Arrangement - Plan A G-00-202 General Arrangement - Section A

These drawings depict the overall concept proposed by Aker Solutions and show Aker Solutions preliminary layout.

Site visits will be required to better define the project scope and further develop these arrangements.Aker Solutions Proposal No. A19904 Minntac Pelletizing Plant Section 5 June 2009 NOx Reduction Project Page 1 United States Steel Corporation 

## Section 5

CAPITAL COST ESTIMATE

The following preliminary Capital Cost Estimate is included for reference. This estimate has been developed by Aker Solutions based on preliminary information and should be considered no better than

+/- 25%.

This estimate is for the first Low NOx Burner sy stem installation on line #7. The system development costs and a significant portion of the construction engineering produced for this initial installation will be reused for installation of the remaining systems.

This document contains a preliminary Capital Cost Estimate intended for use by the recipient in relation to a prospective project. The preliminary Capital Cost Estimate is based upon limited and incomplete information, industry factors and experience with similar facilities. This preliminary Capital Cost Estimate is not an offer to perform work or a guarantee that work can be performed for the amount of the preliminary Capital Cost Estimate or within the period of time specified in relation to this estimate. This preliminary Capital Cost Estimate cannot be accepted by the recipient as the basis of any contract or purchase order without written verification and incorporation into a proposal by Aker Technical Services. This document is confidential and proprietary to Aker Technical Services and may not be used or disclosed to any third party without the express written consent of Aker Technical Services.Aker Solutions Proposal No. A19904 Minntac Pelletizing Plant Section 5 June 2009 NOx Reduction Project Page 2 United States Steel Corporation 

### Line #7 Cost Summary

Item
No. Description Material

Cost Labor Cost Installation

Manhours Total Cost

1.1 Concrete $40,724 $74,141 869 $114,865 2.7% of TDC
1.2 Structural Steel $349,050 $237,028 2,531 $586,078 13.8% of TDC

2 Mechanical $1,762,622 $675,152 7,203 $2,437,774 57.4% of TDC
3 Electrical $247,311 $610,203 6,559 $857,514 20.2% of TDC 4.1 Piping $15,111 $169,335 1,880 $184,446 4.3% of TDC 4.2 Piping Insulation $6,072 $30,426 325 $36,498 0.9% of TDC

5 Instrumentation $26,500 $3,908 42 $30,408 0.7% of TDC $2,447,390 $1,800,192 19,408 $4,247,582 100.0% of TDC (TDM) (TDL) (TDMH) (TDC)

$1,071,936 59.5% of TDL

$5,319,518 72.8% of TIC

$97,896 4.0% of TDM
$1,000,000 13.7% of TIC Fives North American Engineering $102,000 1.4% of TIC Fives North American Field Costs (Estimated) $60,000 0.8% of TIC
Metso Engineering $93,000 1.3% of TIC
$637,137 15.0% of TDC $1,990,033 27.2% of TIC

$7,309,551 172.1% of TDC Freight Aker Solutions Engineering and Project Mngmn't

Contingency

Total Non-Field Costs Percentages

(IFC)

(TFC) Total Direct Field Cost

Indirect Field Costs

Total Field Costs

Total Low NOx Burner System Costs (TIC)Aker Solutions Proposal No. A19904 Minntac Pelletizing Plant Section 5 June 2009 NOx Reduction Project Page 3 United States Steel Corporation 

### Field Indirect Cost Breakdown

Code Description Indirect Cost

13 Small Tools & Safety ($2.00 / mnhr) $38,816 15 Scaffolding Rental @5% $90,010 16 Misc Equipment Rental @8% $144,015 17 Large Equipment Rental $225,000

18 Scaffolding Support Craft (crew for 3 months) $260,000 19 Startup & Commissioning Spares $8,813 20 Startup & Commissioning Supervision $35,252
21 Contractor Overhead @8% $144,015
22 Contractor Profit @7% $126,013

Construction Indirect Total $1,071,936

Fives North American Field Costs (Testing) 30 days $2,000 cost/day
Total Fives NA Field Cost $60,000



### Mechanical Equipment Detail

2 Mechanical Qty Unit Equip Cost 2.1 Firing Hood Modifications 1 Tons $4,016

2.2 Low NOx Combustion System 1 Each $1,150,000

2.3 Combustion Air Blower (42701) w/ inlet damper & motor 1 Each $179,000
2.4 Ductwork 53.6 Tons $217,735
2.5 Slide Plates 15 Lot $3,600 2.6 Expansion Joints 4 Lot $11,200 2.7 Dampers 2 Lot $32,600 2.8 Damper Operators 2 Lot $8,000
2.9 Access Doors 2 Lot $1,800 2.10 Refractory & Anchors 1530 FT3 $50,818
2.11 Thermal Insulation 9086 FT2 $103,852 2.12 Firing Hood Demolition 1 Tons $0
Subtotal $1,762,622Aker Solutions Proposal No. A19904 Minntac Pelletizing Plant Section 6 June 2009 NOx Reduction Project Page 1 United States Steel Corporation 

## Section 6

COMMERCIAL OFFER

Compensation Basis

Since this is essentially a developmental engineering project, Aker Solutions proposes to perform the Scope of Work described in this proposal on a reimbursable basis. Perhaps at the completion of Phase I development engineering, when the project requirements are better known, Aker Solutions would be open to discussing changing this approach based on our mutual understanding of the project risks.

Aker Solutions’ standard reimbursable rates for all Aker Solutions’ personnel for 2009 are as indicated on the attached Professional Services Rate Schedule (Exhibit “A”). These rates are valid through the end of 2009. All personnel have been divided into seven (7) categories for exempt personnel and four (4) categories for non-exempt personnel, with the appropriate straight time charging rate indicated by category. These rates include all wages, fringe benefits, payroll taxes, overhead, and fee.

In addition to the Professional Services Rates, USS will be invoiced for billable expenses such as the direct project costs for printing, reproduction, CAD and software costs, personal computer usage,telephone, fax, and courier/mail (“Incidentals”). These costs shall be reimbursed by USS at an allinclusive flat rate per hour expended. Aker Soluti ons’ standard reimbursement rate for incidentals for 2009 is also indicated on the attached Professional Services Rate Schedule (Exhibit “A”).

If utilized, overtime will be charged in accordance with the overtime status of each specific Aker Solutions employee. Straight Time Rates will be invoiced for those personnel paid straight time for overtime (i.e. exempt personnel). Overtime Rates w ill be invoiced at 1.25 times the indicated Straight Time Rate for those personnel paid premium time for overtime (i.e. non-exempt personnel). Overtime will only be authorized for Aker Solutions’ personnel with USS’s prior approval.

The Professional Services Rates do not include any taxes, duties, tariffs or fees of any kind, except United States federal, state and local income taxes. Any applicable taxes or fees over and above those indicated will be borne directly by USS.

All outside services (third-party services) provided by Aker Solutions in performance of the Scope of Work will be provided at cost plus a 5% mark-up on the direct cost.

The engineering provided by FNAC and Metso will attract this mark-up as this work will be subcontracted through Aker Solutions. The equipment, fabrications, and construction services purchased by Aker Solutions as agents for USS will not attract this mark-up as the cost of this material will not flow through Aker Solutions.

All travel and living costs incurred by Aker Solutions’ personnel in performance of the Scope of Work

will be reimbursable at cost.Aker Solutions Proposal No. A19904 Minntac Pelletizing Plant Section 6 June 2009 NOx Reduction Project Page 2 United States Steel Corporation 

### Estimated Costs

The Estimated Cost of the services to be performed by Aker Solutions / FNAC / Metso, as defined in this proposal, are included in the preliminary Capital Cost Estimate included herein.

Aker Solutions will not proceed wi th any Services that would result in exceeding the authorized Estimated Cost without prior written authorization from USS.



### Invoicing and Payment

Upon contract award, Aker Solutions shall issue an invoice for the projected value of the reimbursable services for the first month or portion thereof.

Subsequently, Aker Solutions will submit an invoic e on or about the first day of each month for the mutually agreed upon projected value of the reimbursable services to be provided by Aker Solutions in that month. Each invoice will include an adjustment (debit or credit) for the actual value of services provided in the prior month versus the projected value for the prior month.

Invoices for Reimbursable Services will include a breakdown of actual charges for the various reimbursable rates and other appropriate documentation, including reasonable back-up for travel and living charges.

Reimbursable services will include amounts invoiced by FNAC and Metso, including down payments as are typical for equipment suppliers.

All progress payments are due and payable net 21 calendar days from date of issue. Payment shall be by wire transfer. No retention shall be withheld from Aker Solutions’ invoices.



### Contract Terms and Conditions

This proposal is based on the terms and conditions of the existing Blanket Order (PO 00000456) between Aker Solutions and USS, which has been in effect for several years.



### Intellectual Property

Fives North American Combustion, Inc., owns and remains the owner of all intellectual property rights and know-how associated with the Low NOx Combustion technology contained in this proposal, including those aspects that have been developed specifically for this proposal, as well as of all the technical documents, graphics, plans or drawings, etc., provided.



### Validity

This proposal is valid for 30 days, after which time it is subject to review and confirmation by Aker

Solutions.Aker Solutions Proposal No. A19904 Minntac Pelletizing Plant Section 7 June 2009 NOx Reduction Project Page 1 United States Steel Corporation 

## Section 7

CLARIFICATIONS

1. USS to provide access to site.

2. USS to provide access to existing drawings.

3. USS to provide current plant operating data in order to produce a process simulation reflecting

current conditions.

4. USS to confirm No.7 kiln as the selected kiln for modifications.

5. USS to provide all required utilities (Air, Water, Gas) assumed to be with-in 100 feet of the kiln discharge.

6. It is assumed that the existing electrical room, for Kiln No.7, has adequate space to house new electrical gear.

7. No modification to the parallel flow duct is anticipated at this time.