From: Aagenes, Jason D.

To: "Beth Havlik"; "George Pruchnofski"; "Erik Boleman"; "Paul Taylor (ptaylor@barr.com)"; Dostal, Thomas C.;

Davis, Todd E.

Cc: Skolasinski, Dave Z.; Roth, Todd D.

Subject: FW: DRAFT STS report

Date: Tuesday, June 26, 2007 5:08:31 PM

Attachments: UTAC Cost Analysis SpreadsheetSO2 STSHWTDraft 5 30 07.xls

STS UTAC cost analysis.doc

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 cost

analysis.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
Draft United Taconite LLC

Forbes, Minnesota

Line 2 Sulfur Dioxide Scrubbing

May 30

, 2007

LINE 2

Item Description Unit#

Operating Labor Per Chrissy Bartovich e-mail $/hr 45.31

Maintenance Labor Per Chrissy Bartovich e-mail $/hr 47

Electricity

Expected annual average industrial price of 

electricity for 2007 - DOE 

http://tonto.eia.doe.gov/steo_query/app/elecpage.

htm $/kwh 0.051

water Per Chrissy Bartovich e-mail $/mgal 2.07

Compressed Air

EPA Air Pollution Control Cost Manual 6th Ed 

2002, 

Section 6 Chapter 1 Example problem; Dried & 

Filtered, Ch 1.6 '98 cost adjusted for 3% inflation $/mscf 0.32

Waste hauling

Two truckloads / day to lined landfill or pond; 

8500 ST/yr $/ton 52.00

Lime Estimate from Cutler-Magney Company 2006 $/ton 88.98

Ore Loss 5000 LTPY (with mechanical collectors) $/ton sell - cost 15.00

Sales Tax

% 6.5

Operating Unit:

Emission Unit Number

Design Capacity (never used in calc.) LT/hr 452

Expected Utilization Rate 94%

Expected Annual Hours of Operation Hours 8,216

Annual Interest Rate 7.0%

Expected Equipment Life yrs 20

Line No.2

Standardized Flow Rate scfm@ 32F 518,220

Temperature Deg F 110

Moisture Content 10.0%

Actual Flow Rate acfm 600,000

Standardized Flow Rate scfm @ 68 deg F 555,000

Dry Std Flow Rate dscfm @ 68 deg F 499,500

CAPITAL COSTS

Direct Capital Costs

Purchased Equipment

1

 (A)

Mechanical Dust Collector(s) Barron Industries/HWT 1,150,000

Kiln system Fans and Motors (2) Robinson/Barron/WEG/H. Taylor 2,240,000

Scrubbers (2) H. Taylor 2,400,000

Recirculation tank (lined) Jamar/H. Taylor 320,000

Mist eliminator wash tank (rubber lined) H. Taylor 240,000

System recirculation piping (elastomer lined) H. Taylor 285,000

Lime storage silo and associated lime mixing/handling equipment Portec/H. Taylor 480,000

Scrubber blowdown thickener, filter and material handling and day storage sysJardar Systems, Inc./H. Taylor 2,800,000

Unlined system piping H. Taylor 125,000

Ductwork H. Taylor/jamar 2,300,000

System Stack H. Taylor/R. C. Fabricators 425,000

Monolithic linings (scrubber, discharge ductwork and stack) Dudick Corrosion proofing/U. S. Coatings/H. Taylor 675,000

Recircualtion pumps/ blowdown pumps (including motors) Warman/H. Taylor 460,000

Instrumentation and controls Jardar Systems, Inc./H. Taylor 430,000

Structural steel and access (materials) STS/H. Taylor 880,000

Scrubber building (erected on foundation) STS 1,180,000

Purchased Equipment Costs (A) 16,390,000

MN Sales Taxes 6.5% 1,065,350

Freight 5% of control device cos 819,500

Purchased Equipment Total (B) 12% 18,274,850

Installation

"Foundations" (building, incl. floor; fan and motor pad, stack foundation STS 1,500,000

Handling & erection

2 of purchased equip c 12,000,000

Electrical (MCC and power distribution) Jardar Systems/H. Taylor 920,000

Structural steel installation STS 535,000

Inlet ductwork insulation and lagging H. Taylor 980,000

Painting 1% of purchased equip c 182,749

Installation Subtotal Standard Expenses 16,117,749

Total Direct Capital Cost, DC 34,392,599

CONTROL EQUIPMENT COSTS

Capital Costs

 Direct Capital Costs

 Purchased Equipment (A)

 Purchased Equipment Total (B) of control device cos 16,390,000

18,274,850

 Installation - Site Specific Costs 16,117,749

 Total Direct Capital Cost, DC 16,117,749

 Total Indirect Capital Costs, IC 15% of purchased equip c 34,392,599

Total Capital Investment (TCI) = DC + IC 2,192,982

58,536,929

Operating Costs

 Total Annual Direct Operating Costs

Labor, supervision, 

materials, 

replacement parts, 

utilities, etc.

 Total Annual Indirect Operating Costs

Sum indirect oper 

costs + 

capital recovery 

cost 7,483,622

Total Annual Cost (Annualized Capital Cost + Operating Cost) 6,795,163

14,278,785

Indirect Capital Costs

Engineering, supervision 5% of purchased equip c 913,743

Construction & field expenses 0% of purchased equip c 

0

Contractor fees 0% of purchased equip c 

0

Start-up 1% of purchased equip c 182,749

Performance test 1% of purchased equip c 182,749

Model Studies NA of purchased equip c NA

Contingencies 5% of purchased equip c 913,743

Total Indirect Capital Costs, IC 12% of purchased equip c 2,192,982
Draft United Taconite LLC

Forbes, Minnesota

Line 2 Sulfur Dioxide Scrubbing

May 30

, 2007

Total Capital Investment (TCI) = DC + IC 36,585,581

Retrofit multiplier 60% of TCI 21,951,348

Total Site Specific Costs0

Total Capital Investment (TCI) Retrofit Installed 58,536,929

OPERATING COSTS

Direct Annual Operating Costs, DC

Operating Labor

Operator 45.31 $/Hr, 0.5 hr/8 hr shift 23,267

Supervisor 15% 15% of Operator Cos 3,490

Maintenance

Maintenance Labor 47.00 $/Hr, 0.5 hr/8 hr shift 24,135

Utilities, Supplies, Replacements & Waste Management

Electricity NA 465,032

Water 2.07 #REF! 136,394

Waste hauling 52.00 $/ton 442000

Lime 88.98

$/ton, 178 lb/hr, 

8216 hr/yr, 

93% utilization 229476

Replacement Parts and Installation 6,159,828

Total Annual Direct Operating Costs 7,483,622

Indirect Operating Costs

Overhead 60% of total labor and 

material costs 30,535

Administration (2% total capital costs) 2% of total capital costs 731,712

Property tax (1% total capital costs) 0% of total capital costs 0

Insurance (1% total capital costs) 1% of total capital costs 365,856

Production loss 5000LTY 141,589

Capital Recovery 0.0944 for a 20- year equipm 5,525,472

Total Annual Indirect Operating Costs 6,795,163 Sum indirect oper co 6,795,163

Total Annual Cost (Annualized Capital Cost + Operating Cost) 14,278,785 14,278,785

See Summary page for notes and assumptions

Capital Recovery Factors

Primary Installation

Interest Rate 7.00%

Equipment Life years 20

CRF 0.0944

Electrical Use

Blower, Scrubber EPA Cost Cont Manual 6th ed Section 5.2 Chapter Flow acfm 800,000 ∆ P in H2O 14.5

Efficiency 0.65

kW 2,088.0

Circ Pump EPA Cost Cont Manual 6th ed Section 5.2 Chapter Flow 16,000 gpm

Liquid SPGR1

∆ P ft H2O 70

Efficiency 0.6

kW 300.8

H2O discharge to thickener EPA Cost Cont Manual 6th ed Section 5.2 Chapter flow 900 gpm

Liquid SPGR1

∆ P ft H2O 75

Efficiency 0.6

kW 16.9

Total kW 2,405.7

Reagent Use & Other Operating Costs

Lime Use

Calculated lime usage 2,600 lt/yr = 608.6 #/hr 608.50

lb/hr lime, lime addition at 1.1 times the stoichiometric ratio 670.00

Liquid/Gas ratio * L/G = Gal/1,000 acf 20.0

Circulating Water Rate

2 gpm 16,000

Water Makeup Rate = Blowdown of 350 gpm + evap. Loss 493.00

143 gpm

Evaporation Loss

4

 = gpm 142.65

Operating Cost Calculations

Annual hours of operation: 8,216

Utilization Rate: 93.7%

Operating Labor

Op Labor Unit cost $ $/Hr 45.31

Use rate hr/8 hr shift 0.5

Annual use* 514

Annual cost 23,267

$/Hr, 0.5 hr/8 hr shift, 8216 hr/yr

Supervisor 15% of Op.

Annual cost 15% of Operator Cos 3,490

Maintenance

Maint Labor $/Hr 47.00

Use rate hr/8 hr shift 0.5

Annual use* 514

Annual cost 24,135

$/Hr, 0.5 hr/8 hr shift, 8216 hr/yr

Maint Mtls 100 % of Maintenance Labor

Annual cost 100% of Maintenanc 24,135

Utilities, Supplies, Replacements & Waste Management

Electricity $/kwh 0.051

Use rate kW-hr 2406

Annual use* 18520072

Annual cost 465032

$/kwh, 2,406 kW-hr, 8216 hr/yr, 93.7% utilization
Draft United Taconite LLC

Forbes, Minnesota

Line 2 Sulfur Dioxide Scrubbing

May 30

, 2007

Water $/mgal 2.07

Use rate gpm 142.7

Annual use* 65,891

$/mgal, 143 gpm, 8216 hr/yr, 93.7% utilization

Annual cost 136,394

Waste Disposal Two truckloads/day, 8500 st/year

0.0

Annual use*0

Annual cost0

$/ton, 8500 s./yr 7946 hr/yr, 94% utilization

Lime $/ton 88.98

Use rate lb/hr 670.0

Annual use* 2579

Annual cost 229476

$/ton, 670 lb/hr, 8216 hr/yr, 93% utilization

*annual use rate is in same units of measurement as the unit cost factor

Replacement Parts & Equipment:

Dust Collector Tubes

Equipment Life yrs4

CRF CRF factor from Table A-2 X equipment life 1.8878

Replacement cost each replacement Incl. tax and freight 57500

Replacement Installation Cost each replacement 33200

Capital recovery cost of replacementsInstalled Cost total all replacements 684894

Pump Impellor and Liners (Recirculation and Blowdown Pumps)

Equipment Life yrs4

CRF CRF factor from Table A-2 X equipment life 1.8878

Replacement cost each replacement Incl. tax and freight 43125

Replacement Installation Cost each replacement 12500

Capital recovery cost of replacementsInstalled Cost total all replacements 420036

Duct Expansion Joints

Equipment Life yrs5

CRF CRF factor from Table A-2 X equipment life 1.8878

Replacement cost each replacement Incl. tax and freight 46000

Replacement Installation Cost each replacement 11000

Capital recovery cost of replacementsInstalled Cost total all replacements 322814

Fan Wheels (proportioned cost for larger wheel; process needs fan with or without FGD

Equipment Life yrs 10

CRF CRF factor from Table A-2 X equipment life 1.8878

Replacement cost each replacement Incl. tax and freight 460000

Replacement Installation Cost each replacement 75000

Capital recovery cost of replacementsInstalled Cost total all replacements 1009973

Scrubber Venturi Rods and Holders

Equipment Life yrs3

CRF CRF factor from Table A-2 X equipment life 1.8878

Replacement cost each replacement Incl. tax and freight 69000

Replacement Installation Cost each replacement 15000

Capital recovery cost of replacementsInstalled Cost total all replacements 898593

Mist Eliminator vanes

Equipment Life yrs6

CRF CRF factor from Table A-2 X equipment life 1.8878

Replacement cost each replacement Incl. tax and freight 260000

Replacement Installation Cost each replacement 30000

Capital recovery cost of replacementsInstalled Cost total all replacements 1277411

Scrubber, discharge duct and stack lining

Equipment Life yrs5

CRF CRF factor from Table A-2 X equipment life 1.8878

Replacement cost each replacement Incl. tax and freight 59000

Replacement Installation Cost each replacement 180000

Capital recovery cost of replacementsInstalled Cost total all replacements 1353553

Venuri Spray Nozzles

Equipment Life yrs2

CRF CRF factor from Table A-2 X equipment life 1.8878

Replacement cost each replacement Incl. tax and freight 15000

Replacement Installation Cost each replacement 3000

Capital recovery cost of replacementsInstalled Cost total all replacements 305824

Blowdown thickening/filtering parts

Equipment Life yrs4

CRF CRF factor from Table A-2 X equipment life 1.8878

Replacement cost each replacement set Incl. tax and freight 78000

Replacement Installation Cost each replacement 45000

Capital recovery cost of replacementsInstalled Cost total all replacements 928798

Instrumentation and controls components

Equipment Life yrs8

CRF CRF factor from Table A-2 X equipment life 1.8878

Replacement cost each replacement set Incl. tax and freight 80000

Replacement Installation Cost each replacement0 30000

Capital recovery cost of replacementsInstalled Cost total all replacements 311487

Total CRC of all replacement parts for system for 20 year operating life 6159828

Sulfur Dioxide (SO

2

) Molecular Weight 64.065

24-hr Max Emis Lb/Hr Max Emis Lb/Hr

Projected future actual emissions (tpy) 2005 Emis Annual T/Yr

lb/hr ppmv

ton/yr ppmv

Control Eff% 50%

Exit Conc.

Controlled Em T/yr 0.0

Reduction: ( 2.8 #/min = 2.8 x 60 x 8216)/2000) (No T/Yr 690.1

Control Cost $/Ton Rem 20690

Notes & Assumptions

1. Calculations per EPA Air Pollution Control Cost Manual 6th Ed 2002, Section 5.2 Chapter 1 (absorbers)

2. Equipment for FGD system estimated by manufacturers listed in notes and STS from recent kiln projects

3. Site prep cost estimates per H. Taylor based on specific UTAC installation area and site prep costs of recent projects.

4. Replacement parts intervals and associated costs based on manufacturers recommendations tempered by actural field experience on similar systems

5. Emission reduction based on Engeeser's report and predicted reduction rate over existing emissions.
Detailed Cost Analysis to Enhance Sulfur Dioxide Removal For Scrubbers Installed 

on Line 2 Taconite Grate Kiln at UTAC.

DRAFT

Basis for analysis

This cost analysis is based on the wet scrubber analysis prepared for the Minnesota 

Pollution Control Agency (MPCA) by Mr. John Engesser, P.E.; “Evaluation of 

Minnesota Taconite Wet Scrubbers at Minntac, Keewatin Taconite, Hibbing Taconite, 

and United Taconite”. The results of this evaluation indicate that the United Taconite 

(UTAC) Line 2 system is the only Minnesota Taconite Induration scrubber system 

installation which has the potential to increase sulfur dioxide (SO2) collection efficiency 

by the addition of a chemical reagent to the system scrubbing water. Scenarios reviewed 

in John’s analysis included the use of the following reagents: sodium hydroxide or 

sodium carbonate, lime addition to the existing scrubbing system scrub water 

recirculation system and installation of a new re-circulating lime scrubber similar to the 

Keewatin Taconite scrubber system. Due to the environmental issues which will result 

from the use of a sodium based reagents costing for this scenario was not examined.

Site Visit

The writer made a visit to UTAC to inspect the existing scrubber system and its 

suitability for lime addition SO2 control and to select an area for the installation of a new 

retrofit lime scrubber system.

The results of the site visit are as follows:

Existing Scrubber System

The installed particulate scrubber system uses two 2) identical parallel scrubber 

systems to control particulate exhaust emissions from the grate kiln. Each 

scrubber system has a dedicated “wet” ID fan discharging to a single system 

stack. Each scrubber system consists of two modified Ducon model “VVO’S” 

venturi throat scrubbers discharging tangentially, 180 degrees apart into a single 

cylindrical scrub water droplet separator or mist eliminator. Each Ducon venturi

was initially installed with swing door or “bomb bay” style adjustable venturi 

throat. These bomb bay mechanisms have been replaced with venturi rods. The 

separator was initially designed to use redwood slat mist elimination blades or 

vanes which were replaced with 3 pass metal 316 stainless steel chevron vanes in 

the 1980’s. These vanes are now being retrofitted with higher efficiency sinusoid 

style thermoplastic vanes.

Spent scrub water is treated in each system by a dedicated thickener. The 

overflow from the thickeners is returned to the scrubbers with the system make up 

water. Thickener underflow is sent back to the process. System scrub water 
blow down is used to control suspended solids in the scrub water to minimize 

abrasion wear in the scrubber.

Potential location for retrofit scrubber system

The existing system installation is very compact and does not permit the 

installation of any required intermediate system flue gas components such as 

mechanical collectors between the kiln and existing scrubbers. Moreover, the 

existing location does not have the area available for a recirculation scrub water 

system. For the retrofit scrubber system cost analysis an area just outside the 

West end of existing building in the location of the existing stack was assumed to 

be available for the new system installation.

Line 2 SO2 scrubbing scenarios

Lime addition to existing system

The design basis for this system is to use the existing particulate scrubber system 

for simultaneous SO2 and particulate scrubbing. The only additional equipment 

required for this scenario is the addition of a lime storage and feed system.

Cost Analysis

The cost analysis for this scenario was not prepared since the operating 

chemistry required for this system and the inherent design of the existing 

scrubbers will cause severe scrubber internal chemical scaling rendering 

the system inoperable.

New retrofit lime scrubber system

The design basis for this recirculating lime scrubber system is similar to that of 

the Keewatin Taconite scrubber system and requires the use of a mechanical 

collector upstream of the scrubber to remove enough particulate form the gas 

stream to permit scrub water recirculation to conserve reagent (lime), prevent 

calcium scaling, and prevent abrasion wear from the recirculated collected 

particulate in the scrub water.

The cost analysis for this scenario assumes that a new scrubber system will be 

required to be installed in the area downstream of the kiln in the location presently 

taken by the existing scrubber system fan, scrubber and stack. The footprint 

requirements of this new system will require the existing building to be extended 

to the West in the area presently occupied by the existing system stack. 
Retrofit system design data

Volume (total two scrubbers): 600,000 ACFM

Pressure (at scrubber inlet): 16” W. C.

Inlet flue gas temperature; 110 °F

SO2 inlet: 140 ppm

Lime use: 608 lb/hr

SO2 Collection efficiency: Approximately double existing rate @ 50%

Design 

The scrubbing equipment required for the new system presented in the 

cost analysis is as follows:

• Mechanical Collector/multi tube cyclone

• Venturi Rod scrubbers (two for parallel operation required)

o Materials of construction:

 Monolithic lined carbon steel (vinyl ester)

 AL 6XN alloy

 Rubber lined internal components

 Ultem plastic internal mist eliminator components

 Ceramic lined internal components

 Stellite scrub liquor nozzles

• System ID fans and motors (two required)

o Kiln/mechanical collector/scrubber ID fan systems, single 

dry fan replacement for each of the wet fans 2A and 2B to 

provide additional pressure drop for mechanical collector 

and scrubber SO2 scrubbing. Fans will be located 

downstream of the new mechanical collector.

• Ductwork

o Carbon steel ductwork to connect kiln discharge to new 

mechanical collectors, mechanical collector discharge to 

new ID fan inlets and fan outlets to scrubber inlets. All 

ductwork insulated and lagged.

o Lined carbon steel ductwork/stack breaching to connect 

scrubber discharges to stack. Carbon steel ductwork 

designed and fabricated to receive field installed monolithic 

vinyl ester lining for corrosion protection.

• Scrub water recirculation system

o Monolithic vinyl ester lined recirculation tank
o Warman rubber lined pumps, operating and standby; each 

scrubber system

o Rubber lined recirculation piping

o Alloy and rubber lined valves and specialties

• Scrubber mist eliminator wash tank system

o Monolithic vinyl ester lined recirculation tank

o Warman rubber lined pumps, operating and standby; each 

scrubber system

o Rubber lined recirculation piping

o Alloy and rubber lined valves and specialties

• Scrub liquor settling and treatment system

o Cone thickener with filter press

o Monolithic lined vessel and launders with rubber covered rake 

system

• Lime storage and feed system

• Instrumentation and controls including the following

o PLC control system

o Nuclear densitometer

o System RTD temperature elements

o Differential pressure transmitters

o Tank level sensors

o Pressure sensors and transmitters

• System Stack

o Carbon steel monolithic vynilester lined

• Lot structural steel and supports for scrubber system components

• Foundations

• Scrubber system building

New retrofit system installation and operating costs

The system operating and installation costs are displayed on the attached spreadsheet.

This spreadsheet was prepared from a sample spreadsheet transmitted to STS from the 

MPCA for the purpose of this cost analysis with missing formulations input from the 

"EPA Air Pollution Control Cost Manual", sixth edition".
Estimates for the pollution control equipment and installation were computed using 

actual costs from recent system installations completed by STS on Grate Kiln particulate/

SO2 scrubbing systems.