From: Beth Havlik
To: Aagenes, Jason D. ; George Pruchnofski Cc: Erik Boleman Subject: RE: Comments on UTAC scrubber cost estimate
Date: Wednesday, July 25, 2007 7:09:49 PM

Jason, 1. For comment on item 1 below, see the email messages from George and me dated yesterday. 2. In theory, John Engesser's comments about sulfate and fluoride buildiup in the recirculating scrubber water may be true in some circumstances. But in real-world circumstances that are very similar to Utac's, the buildup of chlorides, sulfates, hardness, and dissolved solids has proven to raise problems that require further water treatment. For example, Minntac has significant water quality issues for several reasons including buildiup of chlorides, sulfates, hardness, and dissolved solids in the process water, that is recycled tailings basin water and makeup water from the mine. Buildup occurs because they do not have a discharge permit to relieve buildup. Seepage is the only water discharge from the tailings basin, which is similar to Utac. We understand the seepage from Minntac is causing potential violations of the water quality standards in the receiving streams.

These problems are not encountered with Keetac's scrubber because of two notable differences: 1) it has a permitted blowdown to relieve the buildup, and 2) it does not have to meet the stringent wild rice standards in the receiving waters.

Utac's circumstance most resembles Minntac's in that there is not a scrubber water blowdown treatment to remove water buildup, it does not have a tailings basin discharge permit and the seepage from the tailings basin discharges to lakes that are required to meete the wild rice standard. Therefore, it is necessary to include treatment of the scrubber water at Utac. 3. New fans will be required, and even though the cost includes the new fans, they will be required to replace the existing fans, therefore the process will be required to be shut down during their installation, and this re-emphasizes the requirement to include the cost of downtime.

Sent by GoodLink (www.good.com)

-----Original Message----- From: Aagenes, Jason D. [ mailto:JDAagenes@cleveland-cliffs.com ] Sent: Friday, July 13, 2007 12:28 PM Central Standard Time To: Beth Havlik; George Pruchnofski Subject: FW: Comments on UTAC scrubber cost estimate

Please review and comment.

Sent by Good Messaging (www.good.com)

-----Original Message----- From: Jackson, Anne [ mailto:Anne.Jackson@state.mn.us ] Sent: Friday, July 13, 2007 12:21 PM Eastern Standard Time To: Aagenes, Jason D. Cc: Fenske, Mary Jean Subject: Comments on UTAC scrubber cost estimate

Jason, Mary Jean asked me to finish up the cost estimate for this project. I am in the process of doing that, but thought I should try to answer your questions directly. I don’t see a “natural” place to address these questions in the cost writeup documentation, so I’m replying in this email.These are the comments Mary Jean passed on to me and Hal Taylor:

1) Since the proposed project is a major modification to the process and building, significant process downtime would be anticipated. Please include the economic cost of lost production on Line 2 during construction.

In the conduct of BACT analyses, EPA guidance directs BACT preparers to not include lost production time in the development of capital cost estimates for retrofit projects. Because we are preparing and comparing pollution control alternatives in the same manner as a BACT analysis, lost production costs will not be included in this estimate.

2) Verify that complete water treatment costs for removal of fluorides, sulfates, etc. are included (capital, O&M) for blowdown water. I’m concerned that, over time, untreated blowdown water reporting to the tailings basin would significantly deteriorate our process water quality.

I spoke to John Engesser about the need for additional blowdown water treatment. John reports that as long as the water in the scrubber recirculation system is treated with lime, it will be removing sulfates and fluorides which will be landfilled with the solids and not represent a tailing pond water problem. Chlorides will continue to build, but would take several decades to reach levels of concern (and still be below drinking water standards).

No additional units are included in the cost estimate for water treatment.

3) Verify that proper sized process air fans are included in the design as well as increased electrical demand. A critical component of maintaining production is ensuring that sufficient air remains available to the grate/kiln. With an increased pressure drop expected for this type of scrubber, the process air fans and motors may need to be upgraded.

The cost proposal includes two new ID fans and motors, and are assumed to be properly sized. Power use is included in the annual costs.

Anne M. Jackson, P.E. Minnesota Pollution Control Agency ph: (651) 296-7949

________________________________ This electronic message and any attachments included with this message are for the exclusive use of the individual or entity to which it is intended to be addressed. This message may contain information that is privileged or confidential and thereby exempt and protected from unauthorized disclosure underapplicable law. If the reader of this message is not the intended recipient, or an employee or agent responsible for delivering the message to the intended recipient, be aware that any disclosure, dissemination, distribution or copying of this communication, or the use of its contents, is not authorized and is strictly prohibited. If you have received this communication and are not the intended recipient, please notify the sender immediately and permanently delete the original message from your e-mail system.

________________________________