U .S. Steel Corporation Minnesota Ore Operations P.O. Box 417 Mt. Iron, MN 55768

CERTIFIED MAIL #7008 1140 0000 4098 5072 February 15, 2010 Mr. Christopher J. Nelson, P.E. Manager, Metallic Mining Sector Minnesota Pollution Control Agency 520 Lafayette Road North Saint Paul, MN 55155-4194 SUBJECT: Minntac NOx Reduction Progress Update Dear Mr. Nelson: United States Steel Corporation, Minnesota Ore Operations

- Minntac (Minntac) has received the letter dated January 12, 2009, from the Minnesota Pollution Control Agency (MPCA) regarding the progress Minntac has made in regards to the retroactive PSD permitting requirements of Minntac's Title V air emissions permit. Since receipt ofthe letter, discussion occurred between U.S. Steel and the MPCA on February 2 and 8, 2010, updating the MPCA on the progress ofthe designed low NOx main burner and projected reductions. As requested in the January 12 letter and subsequently discussed during the February 2, 2010 call, U.S. Steel is providing a written update on the progress ofmeeting the 70% reduction goal from the baseline of 13,300 tons NOx per year. Also attached is a proposed updated pilot test schedule. Status of CFD Model and Low NOx Main Burner The original Engineering Report conducted by Hatch (NOx Reduction Analysis report, January 30, 2009) had a NOx reduction of 10-20% from the installation of an "off the shelf' low NOx main burner. Over the past year, Minntac has been working with Hatch and Coen to design a burner specifically for Minntac's indurating Line 7 and associated fuel mixes to optimize the burner characteristics and ultimately reduce the generation of thermal NOx

. As a permit condition, CFD modeling was initiated to model the indurating generation of NOx to further the investigation ofpotential reductions in NOx in the indurating process. Utilizing the CFD model developed by Hatch, the low NOx main burner designed by Coen was modeled to predict NOx reductions associated with its installation. The preliminary results predict significant reductions in NOx generation from the installation ofthe burner. For the main fuel mix scenarios typically utilized at Minntac, the model predicts the following range of reductions in NOx generation from existing emission levels:Fuel Mix Coal & Natural Gas Biomass & Natural Gas Coal/Biomass/Natural Gas Percent Reduction 60-90% 80-90% 60-90% These reductions are in line with the goal of a 70% reduction from the 13,300 tons of NOx per year baseline. A fmalized CFD modeling rep01t will be submitted on February 18, 20I0. This report will include an original validated CFD model and CFD results for the designed low NOx main burner. Cunently, U. S. Steel plans on installing the designed lowNOx main burner on Line 7 in April 2010. The major repair for Line 7 is being scheduled around burner an·ival which is cunently estimated at mid April. Upon initial startup, U. S

. Steel will determine ifthere are any fatal flaws with the bumer within 45 days. To thoroughly evaluate the performance of the new low NOx main burner, a full scale demonstration will take approximately 6 months. However, to ensure time is not lost towards progressing towards the NOx reduction goal should the burner not demonstrate reductions in line with the goal, U. S. Steel will proceed clown a parallel path by fm1her investigating RSCR technology for a pilot test. Regenerative Selective Catalytic Reduction (RSCR) Pilot Testing During the week ofFebruary 8, 2010, Minntac representatives met with Babcock Power (Babcock) representatives to discuss the RSCR technology. Based on initial discussions it was clear the Babcock representatives did not have a good understanding ofthe area the technology would potentially be located. A tour was provided to aid in the understanding ofthe process and facility layout including the space limitations due to railroad tracks and other infrastructure. Babcock was requested to schedule a technical presentation for Minntac in the near future. Babcock was also asked to provide additional information on catalyst poisons that Minntac should test for in the scrubber exhaust. As noted by MPCA, previous poisons tests were conducted on the duty side. Minntac plans to schedule a catalyst poisons test following the teclmical presentation by Babcock Low Temperature Oxidation (LoTOx) Pilot Testing U. S. Steel received contact information from the MPCA in regards to the LoTOx technology. U. S. Steel representatives have attempted to contact the vendor, but have received no response to date. Due to the lack ofresponse, U. S. Steel, in agreement with the MPCA, will proceed with continuing evaluation ofthe RSCR teclmology should it be deemed necessary to pilot test due to a lack ofsuccess from the installation ofa low NOx main burner

. Enclosed is an updated pilot testing schedule as requested. Minntac has expended a great deal oftime and effort on the new low NOx main burner to hopefully ensure a successful application with a significant reduction in thermal NOx generation. Based on CFD modeling we are very encouraged by the potential of this application. As previously discussed a reduction in NOx generation is extremely beneficial for many reasons. Add on controls have the potential for cross media impacts, increases in other pollutants andenergy impacts which relate to C02 emissions. Based on the information we currently have the new low NOx main appears to meet the goals of all interested pmiies. Even though we are confident in the burner we will continue to investigate RSCR as a parallel path in the event that the burner does notperform to the level anticipated. Based onprevious misunderstandings we feel keeping the lines ofcommunication open is important. The comprehensive CFD modeling will be submitted on February 18, 2010. We suggest a meeting be set up after MPCA and the Federal Land Managers have time to review the document. If it would be beneficial to have Hatch involved to explain the model and results, U. S. Steel will coordinate a meeting. If you have any questions or would like any additional information please feel free to contact me at (218) 749-7364 or clbartovich@uss.com.

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## ~~**Vlv'** Chrissy Bartovich Manager -Environmental Services Minnesota Ore Operations United States Steel Corporation

### United States Steel Corporation Minnesota Ore Operations - Minntac NOx Pilot Testing Schedule February 15, 2010 Description Pilot Test No. 1 -Low NOx Main Bumea· 1. Complete engineering evaluation of Low NOx burner options for replacement ofmain burner. 2. Submit required applications/requests for pilot test approval 3. Receive permit or written approval from MPCA that no permit(s) are needed. 4. Appropriate funds for the burner trial. 5. Install burner during major repair 6. Initial startup after installation. 7. Complete initial evaluation ofperformance. 8

. Complete full scale evaluation. 9. Submit final rep01t to MPCA Pilot Test No. 2- RSCR I. Schedule initial meeting with manuf acturer /vendor to conduct pilot test. 2. Conduct meeting with technical representatives from both organizations. 3. Complete catalyst poisons test pending additional information from vendor and stack test crew availability 4. Submit poisons test information to vendor and MPCA 5. Schedule meeting with MPCA and vendor to discuss results ofpoisons test 6. Submit permit applicability deter mination for pilot testing if no technical issues are found and burner is not performing as expected. Milestone Date* June 1, 2009

June 30, 2009

November 20, 2009 February 26, 20 I0 Mid-April 30 days after Step 5 45 days after Step 6 180 days after Step 7 60 days after Step 8 February 9, 20 10

60 days after Step 1

60 days after Step 2

45 days after Step 3 30 days after Step 4 30 days after Step 57. Receive permit or written concurrence from MPCA no TBD-MPCA permit needed for pilottesting 8. Appropriate funds for the RSCR trial 60 days after Step 7 9. Construction ofpilot test equipment- Babcock Power 7 months after Step 8 I0. Mobilization ofpilot test equipment on-site. 1 month after Step 9 II. Begin evaluation ofperformance l month after Step 10 12. Complete evaluation ofperformance 6 months after Step 11 13. Submit results ofperformance evaluation. 2 months after Step 12 *An interim milestone date, which ifmissed, ts not a violation provided that the final compliance date(s) are met.