# October 25,2007

Mary Jean Fenske, PE

Minnesota Pollution Control Agency

520 Lafayette Road N

St. Paul, MN 55155-4194 Cliffi Mining Company, Manager



# Hand Delivered

Re: United Taconite Line 2 Revised BART Analysis for an S02 Wet Scrubber

Dear Ms. Fenske:

On September 7, 2006, United Taconite submitted to MPCA its Best Available Retrofit

Technology (BART) analysis for NOx and S02 control on Line 1 and Line 2 indurating

furnaces. United's cost estimate for S02 control on Line 2 was determined to be $3,361

per ton of S02 removed. After subsequent review of the original BART analysis, United

Taconite believes that three items were inaccurately estimated. Barr Engineering was

directed to revisit these items and develop a revised BART cost estimate for installation

of an S02 wet scrubber on Line 2. As a result, the revised cost estimate for additional

S02 control on Line 2 is in excess of $9,700 per ton of S02 removed. The revised items

are as follows:

• Enhanced water treatment system- The original BART analysis only included

water treatment costs for removal of particulates. MPCA water quality staff have

expressed concern that taconite tailings basin seepage at United Taconite and

other facilities may exceed water quality standards for dissolved solids and

sulfates. To prevent increased concentrations of sulfate and other dissolved solids

from accumulating in the tailings basin and process water, it was determined that

a reverse osmosis water treatment system would be needed.

• Economic cost of lost production on Line 2 during construction

- The original

BART analysis did not include costs for lost production on Line 2 during

construction and tie-in of an additional S02 scrubber. United Taconite strongly

believes that federal and state BART guidance documents support inclusion of

these costs. These guidance documents specify that cost estimates should be

based on the OAQPS Control Cost Manual which specifically includes the cost of

lost production as a retrofit expense.

• Project contingency cost- The original BART analysis used an unrealistically

low contingency cost factor. EPA guidance for similar projects support a 30%

# contingency for projects at this stage of development: pre-design/initial feasibility

review.

To facilitate review of the modified cost estimate, the attached tables address only the

revised items. United Taconite requests that MPCA review this material and include the

Barr cover letter and updated tables as an addendum to the original BART analysis.

Please reference the revised cost estimate when considering S02 control technology and

limits for United Taconite Line 2.

If you have any questions or need additional information, please contact me at 218-7 44-

7803 or at jdaagenes@cleveland-cliffs.com.

Sincerely,

Section Manager, Environmental Affairs

Cc:

Jack Tuomi

David Cartella

David Skolasinski

Jim Mennen

# Barr Engineering Company

4700 West 77th Street • Minneapolis, MN 55435-4803

Phone: 952-832-2600 • Fax: 952-832-2601 • www.barr.comAn EEO Employer



# Minneapolis, MN • Hibbing, MN • Duluth, MN • Ann Arbor, Ml • Jefferson City, MO



# October 22, 2007

Jason Aagenes

Section Manager Environmental Affairs

United Taconite

P.O. Box 180

Eveleth, MN 55734

Re: Updates to the BART analysis for an S0 2 

# wet scrubber on Line 2



# Dear Jason:

Several updates to the BART cost calculations submitted to MPCA on September 7, 2006 are required.

We have revised the calculations to address those items (see the attached Tables 1, 2, 6, and 13).

Each item is described below as well as the basis for the update.

1. Water treatment costs should include removal of fluorides, sulfates, etc. from the blowdown water

When scrubbers are used to remove S0 2 

# from the stack gases, the S0 2 

# is transferred into the scrubber

water that is recycled to the process. Since the process water is recycled continually, over time

constituents such as sulfate, fluoride, and dissolved solids have been shown to build up in the tailings

basin.

The Minnesota Department of Natural Resources (MDNR) has evaluated taconite water chemistry and

has published a report on water treatment methods that can be used to increase S0 2 

# scrubbing and

potential implications to process operations due to water chemistry. 1 

# That report confirmed that

sulfate, fluoride, and other dissolved solids buildup in the recirculating scrubber will lead to increased

concentrations over time. However, that report did not address water quality standards that are

applicable at each plant. Currently the seepage water concentrations of sulfate, fluoride and other

dissolved solids from some taconite basins, including United Taconite, are above water quality

standards. Improving S0 2 

# scrubbing will accelerate buildup of sulfate and other dissolved solids.

MPCA water quality staff are concerned that taconite tailings basin seepage water may cause

exceedences of water quality standards in downstream receiving waters. MPCA expects that treatment

of the process water will be applied as necessary to meet water quality standards in the downstream

receiving waters.

United Taconite scrubber water blowdown treatment design would need to reflect that some lakes

downstream from the tailings basin are subject to the state's most restrictive sulfate water quality

standards (i.e. those for wild rice). Such design also must address the potential for methyl mercury

1 

# John Engesser, MDNR, 

# Evaluation of Minnesota Taconite Wet Scrubbers at Minntac, Keewatin Taconite,

Hibbing Taconite, and United Taconite, March 16, 2007 e-mail correspondence to Mary Jean Fenske.

# Mr. 1 

# ason Aagenes

October 22, 2007

2



# formation from sulfates particularly as the facility is located in the St. Louis River Basin, and the St.

Louis River currently does not meet water quality standards for mercury.

We developed a feasibility-level cost estimate for treating the scrubber blowdown of 552 gallons per

minute. We assumed that the treatment level required would be the sulfate wild rice standard of 10

mg/1. The only proven water treatment technology that can provide this level of treatment is reverse

osmosis. The cost of reverse osmosis treatment would be $33/gallon. The cost estimate is provided in

Table 13.

The water treatment cost was determined to be $33

# p~allon. We included this number in the BART

calculations in Table 2, the tab named Utility Chern$ Data.

2. The economic cost of lost production on Line 2 during construction should be included

The cost of lost production is a real cost that the facility will incur if add-on controls are required, so

those costs must be included in the calculations. The federal and state BART guidance supports

including those costs. The guidance directs that, cost estimates should be based on the OAQPS

Control Cost Manuae. One of the purposes of the Manual is to provide a consistent methodology for

all air pollution control costing. 3 

# Since it was intended to apply very broadly, the OAQPS manual

directly addresses cost considerations if a retrofit is required.

Chapter 2 of the OAQPS Manual is dedicated to the concepts and methodology for estimating the cost

of installing air pollution controls. According to the Manual, "The net revenue (i.e., gross revenue

minus the direct costs of generating it) lost during this unanticipated shutdown period is a bonafide

retrofit expense." 4 

# Therefore, including the cost of lost production is appropriate when considering a

retrofit such as in a BART analysis.

The federal BART guidance cites the OAQPS Guidance as a preferred tool for evaluating retrofit cost

calculations 5

• 

# The guidance is clear that other additional methods may be used to supplement

calculations based on the OAQPS Cost Control Manual, but does not support omitting any cost

elements.

"We believe that the Control Cost Manual provides a good reference tool for cost

calculations, but if there are elements or sources that are not addressed by the Control

Cost Manual or there are additional cost methods that could be used, we believe that

these could serve as useful supplemental information." 6



# 2 MPCA, Guidance For Facilities Conducting A BART Analysis, Attachment 2, March 2006, page 10.

3 U.S. EPA, OAQPS, EPA Air Pollution Control Cost Manual, Sixth Edition, EPA/452/B-02--001, January 2002.

Page 1-4.

4 U.S. EPA, OAQPS, EPA Air Pollution Control Cost Manual, Sixth Edition, EPA/452/B-02--001, January 2002.

Page 2-30.

5 Notably, the BART guidance does not cite EPA's New Source Review Workshop Manual as the recommended

tool for BART cost calculations. The focus of the NSR Workshop Manual is narrow: the PSD portion of the

NSR Program which addresses only new and modified major sources. [U.S. EPA, New Source Review Workshop

Manual, Draft October 1990, Page 1]. The NSR Workshop Manual recommends only that "lost production costs

are not included in the cost estimate for a new or modified source."[U.S. EPA, New Source Review Workshop

Manual, Draft October 1990, Page b.l1]. Line 2 is neither "new" nor "modified" within the meaning of that

guidance; it is under consideration here only as a retrofit source.

6 2005 Federal Register 39127.

# Mr. 1 

# ason Aagenes

October 22, 2007

3



# The shutdown time required will be dependent on the site specific circumstances and overall project

design. A specific plan would be required for minimizing downtime as part of the project design.

Eight weeks and possibly longer could be expected assuming foundations and other structural

modifications would be required, fans will be replaced and commissioned, and work will be completed

with tight space constraints and working conditions.

Due to the numerous unknowns at this feasibility phase, we updated the BART calculations to include

the cost of eight weeks of lost production downtime at the rate provided by United Taconite. This

revision is shown on Table 6.

3. A cost contingency of 30% is appropriate and should be used in the BART analysis

As a project progresses through the design process, the estimates of project costs become progressively

more accurate. The feasibility phase occurs prior to the conceptual design phase, where a contingency

of 30% is appropriate. Since the feasibility phase occurs earlier in the project and fewer project details

have been defined, use of a 30% contingency is a low estimate of project contingencies.

EPA provides guidance for cost estimates for the power industry in the Coal Utility Environmental

Cost (CUECost) manual 7

• 

# It 

# references that these types of cost estimates provide an accuracy of plus

or minus 30%. For these reasons, we updated the contingency to 30% on Table 6.



# Conclusion

The net impact of these changes is reflected on Table 1 for the Wet Scrubber on Line 2. We did not

update the calculations for any other technologies or Line 1. The resulting cost per ton of S0 2 

# removed

for Line 2 is greater than $9,700.

Please let us know if you have any questions.

Sincerely,

# n-r~L

George P. Pruchnofski, P .E.

Vice President Beth T. Havlik, P.E.

Vice President

P:\Mpls\23 MN\69\2369A59 UTAC BART\Communications\Utac BART Report Update 10-22-0?.doc



# 7 U.S. EPA, Coal Utility Environmental Cost (CUECost) Workbook User's Manual, Version 1.0, page 

# B-13.ClevelandCliffsIncorporated:UnitedTaconiteBARTReport-<AppendixA>EmissionControlCostAnalysis<Table1>:CostSummaryNOxControlCostSummary1751.5$44,591,3841598.3$70,838,8467975.8$72,298,312S02ControlCostSummaryWetWalledElectrostaticPrecipitator(WWESP)Line1PelletIndurationI80%I2.811.1Line2PelletIndurationI80%I549.92199.7WetScrubber(Additional)Line1PelletInduration5.58.3Line2PelletInduration1099.91649.8$22,183,231$33,856,894$36,202,334$27,741,768$70,537,972P:\Mpls\23MN\69\2369A59UTACBART\WorkFiles\UTACcontrolcostss\UnitedTaconiteControlCosts(2007-10-17)CostSummary$12,665NA$21,183NA$4,539NA$2,501,963NA$32.066$98,901NANA10/17/2007Page1of1ClevelandCliffsIncorporated:UnitedTaconiteBARTReport-<AppendixA>EmissionControlCostAnalysis<Table2>:-SummaryofUtility,ChemicalandSupplyCostsOperatingUnit:Line1PelletIndurationEU040StudyYear2006EmissionUnitNumberStack/VentNumberOperatingUnit:EmissionUnitNumberStack/VentNumberILine1furnacemmbtuLine2furnacemmbtuItemOperatingLaborMaintenanceLaborElectricityNaturalGasWaterCoolingWaterIAirvvaterChemicals&SuppliesLimeAmmonia{29%aqua.)CausticSCRCatalystOtherSalesTaxInterestRateOperatingInformationAnnualOp.HrsEU040AnnualOp.HrsEU042UtilizationRateEquipmentLifeStandardizedFlowRateSV046SV048&049SV046Line2PelletIndurationEU042sv048&049190400UnitCost45.3147.220.0412.812.070.280.32a:too88.980.12484.56141.00$/hr$/hr$/kwh$/mscf$/mgal$/mgal$/mscf$/mgal$/ton$/lb$/ton$/ft36.5%%7.00%%6599Hours8688Hours93%201yrsUnits308,345scfm@32°F615,086scfm@32°FReferenceCost0.230.2588.980.101280Year20062006200620062006199919982007200620002003DataSourceSiteSpecific-UnitedTaconite.SiteSpecific-UnitedTaconite.SiteSpecific-UnitedTaconite.SiteSpecific-UnitedTaconite.SiteSpecific-UnitedTaconite.EPAAirPollutionControlCostManual,6thed.Section3.1Ch1.EPAAirPollutionControlCostManual6thEd2002,Section6Chapter1 .siteUf\ltedTa®nlte,EPAAirPollutionControlCostManual6thEd2002,Section5Chapter2,page2-50.UnitedTaconiteCormetech,Inc.EPAAirPollutionControlCostManualIntroduction,Chapter2,section2.4.2.BARTspreadsheet.BARTspreadsheet.Calculated.Calculated.P:\Mpls\23MN\69\2369A59UTACBART\WorkFiles\UTACcontrolcostss\UnitedTaconiteControlCosts(2007-10-17)UtilityChem$DataNotesConstructionLaborRate.PurchasedCost.$12.02/MMBtu@1066Btu/scf.PurchasedCost.Ch1CarbonAbsorbers,1999$0.15-$0.30Avgof22.5and7yrsand3%inflation.Exampleproblem;Dried&Filtered,Ch1.6'98costadjustedfor3%inflation.costtoinstallandopwatereverseosmosis.AnnualcostsforaretrofitSCRsystemexampleproblem.'00costsadjustedfor3%inflation.2006costSocial(discount)rateusedasadefault.Maximumhoursofoperation2004-2005witha10%safetyfactor.Maximumhoursofoperation2004-2005witha10%safetyfactor.10/17/2007Page1of2ItemUnitCostTemperatureSV046129sv048&049121MoistureContentDegFDegFUnitsReferenceCostYearDataSourceBARTspreadsheet.BARTspreadsheet.Y:\23\69\948UnitedTaconitePostEERPSV04613.8%2005Testing\Data\WasteGasStack.sv048&04913.8%2005Y:\23\69\872UnitedTac\Data.ActualFlowRateSV046369,137acfmBARTspreadsheet.sv048&049726,000acfmBARTspreadsheet.StandardizedFlowRateSV046330,907scfm@68°FCalculated.sv048&049660,092scfm@68°FCalculated.DryStdFlowRateSV046285,110dscfm@68°FCalculated.sv048&049568,896dscfm@68°FCalculated.MaxEmisActualEmissionslb/hrton/yearPollutantLb/HrTon/year('04&'05Max)ppmvppmvlb/mmbtuNitrousOxides(NOx)SV046651.32,151.2319240.2sv048&049375.21,633.39291.4SV048&049withNGonly2021.08,164.5495457.0SulfurDioxides(S02)SV0464.213.911.1sv048&049632.22,749.7111110.5P:\Mpls\23MN\69\2369A59UTACBART\WorkFiles\UTACcontrolcostss\UnitedTaconiteControlCosts(2007-10-17)UtilityChern$Data3.4280701758.279997057NotesWeightedaverage.Averagefromtestresultsin:Line1WGpm5-2-05.Weightedaveragefromtestresultsin:SV0492BPMandSV0482APM.Y:\23\69\872UnitedTac\Data\SV0482APM2005plus10%2004plus10%2004plus10%2004plus10%10/17/2007Page2of2LClevelandCliffsIncorporated:UnitedTaconiteBARTReport-<AppendixA>EmissionControlCostAnalysis<Table6>:SOxControl·WetScrubberOperatingUnit:nUnitNumberedUtilizationRateExpectedAnnualHoursofOperationAnnualInterestRateExpectedEquipmentLifeCONTROLEQUIPMENTCOSTSCapitalCostsDirectCapitalCosts(1)PurchasedEquipment(A}PurchasedEquipmentTotal(B)Installation-StandardCostsInstallation-SiteSpecificCostsInstallationTotalTotalDirectCapitalCost,DCTotalIndirectCapitalCosts,ICTotalCapitalInvestment(TCI)=DC+ICOperatingCostsLine 2PelletIndurationEU04293%8,6881Hours7.0%201yrsIIStackNentNumberStandardizedFlowRateTemperatureMoistureContentActualFlowRateStandardizedFlowRateDrvStdFlowRate22%ofcontroldevicecost(A)85%ofpurchasedequipcost(B)42%ofpurchasedequipcost(B)sv048&049615,086lscfm1211DegF13.8%726,000iacfm660,092!scfm@68°5TotalAnnualDirectOperating CostsLabor,supervision,materials,replacementparts,utilities,etc.TotalAnnualIndirectOperatinQCostsSumindirectopercosts+capitalrecoverycostTotalAnnualCost(AnnualizedCapitalCost+OperatingCost'EmissionControlCostCalculationPollutantNitrousOxides(NOxT/Yr1,633.3ActualEmissions%0%Con$/TonRemNASulfurDioxide2,749.760%1,649.819,788Notes&Assumptions1OriginalestimatefromSTSConsultants.Use0.6Powerlawfactortoadjustpricetostackflowratefrombidbasisof500,000acfm.2Liquid/Gasratio38LIG=Gal/1,000acf.3WaterMakeupRate/WastewaterDischarge=2.0%ofcirculatingwaterrate.4EVaporationratecalculatedfromsteamtableinBasicPrinciplesandCalculationsinChemicalEngineeringThirdEdition.5CUECostWorkbookVersion1.0,USEPADocumentPage2.P:\Mpls\23MN\69\2369A59UTACBART\WorkFiles\UTACcontrolcostss\UnitedTaconiteControlCosts(2007-10-17)EU042WetScrubber5,101,8816,198,7865,268,96833,072,5875,268,96811,467,7532,603,49055,586,57610,291,3115,857,57316,148,88410/17/2007Page1of5ClevelandCliffsIncorporated:UnitedTaconiteBARTReport•<AppendixA>EmissionControlCostAnalysis<Table6>:SOxControl-WetScrubberCAPITALCOSTSDirectCapitalCostsPurchasedEquipment(A)(1)PurchasedEquipmentCosts(A)-Absorber+packing+auxiliaryequipment,ECInstrumentation10%ofcontroldevicecost(A)MNSalesTaxes7%ofcontroldevicecost(A)Freight5%ofcontroldevicecost(A)PurchasedEquipmentTotal(B)22%InstallationFoundations&supportsHandling&erectionElectricalPipingInsulationPaintingInstallationSubtotalStandardExpensesTotalDirectCapitalCost,DCIndirectCapitalCostsEngineering,supervisionConstruction&fieldexpensesContractorfeesStart-upPerformancetestModelStudiesContingenciesTotalIndirectCapitalCosts,ICTotalCapitalInvestment(TCI)=DC+ICRetrofitmultipliefiSiteworkandfoundationsStructuralsteelTotalSiteSpecificCostsTotalCapitalInvestment(TCI)RetrofitInstalled12%ofpurchasedequipcost(B)40%ofpurchasedequipcost(B)1%ofpurchasedequipcost(B)30%ofpurchasedequipcost(B)1%ofpurchasedequipcost(B)1%ofpurchasedequipcost(B)85%5%ofpurchasedequipcost(B)0%ofpurchasedequipcost(B)5%ofpurchasedequipcost(B)1%ofpurchasedequipcost(B)1%ofpurchasedequipcost(B)NAofpurchasedequipcost(B)30%ofpurchasedequipcost(B)42%ofpurchasedequipcost(B)60%ofTCISiteSpecificSiteSpecificP:\Mpls\23MN\69\2369A59UTACBART\WorkFiles\UTACcontrolcostss\UnitedTaconiteControlCosts(2007-10-17)EU042WetScrubber5,101,881510,188331,622255,0946,198,786743,8542,479,51461,9881,859,63661,98861,9885,268,96811,467,753309,9390309,93961,98861,988NA1,859,6362,603,49014,071,2438,442,7461,400,0004,800,00026,872,58733,072,58765,586,57tl10/17/2007Page2of5ClevelandCliffsIncorporated:UnitedTaconiteBARTReport•<AppendixA>EmissionControlCostAnalysis<Table6>:SOxControl·WetScrubberOPERATINGCOSTSDirectAnnualOperatingCosts,DCOperatingLaborOperatorSupervisorMaintenance37.00$/Hr,0.5hr/8hrshift,AnnualOperatingHours15%15%ofOperatorCostsMaintenanceLabor40.00$/Hr,0.5hr/8hrshift,AnnualOperatingHoursMaintenanceMaterials100%ofmaintenancelaborcostsUtilities,Supplies,Replacements&WasteManagementElectricity0.04$/kwh,1,493kW-hr,annualoperatinghours,93%utilizationWater2.07$/kgal,681gpm,annualoperatinghours,93%utilizationWWTreatNeutralization33.00$/kgal,552gpm,annualoperatinghours,93%utilizationLime88.98$/ton,6081b/hr,annualoperatinghours,93%utilizationTotalAnnualDirectOperatingCostsIndirectOperatingCostsOverheadAdministration(2%totalcapitalcosts)Propertytax(1%totalcapitalcosts)Insurance(1%totalcapitalcosts)CapitalRecoveryTotalAnnualIndirectOperatingCosts60%oftotallaborandmaterialcosts2%oftotalcapitalcosts(TCI)1%oftotalcapitalcosts(TCI)1%oftotalcapitalcosts(TCI)0.0944fora20-yearequipmentlifeanda7%interestrateSumindirectopercosts+capitalrecoverycostTotalAnnualCost(AnnualizedCapitalCost+OperatingCost)SeeSummarypagefornotesandassumptionsP:\Mpls\23MN\69\2369A59UTACBART\WorkFiles\UTACcontrolcostss\UnitedTaconiteControlCosts{2007-10-17)EU042WetScrubberAnnualCost%ofAnnualCost24,6030%3,6900%25,6400%25,6400%482,5253%683,5954%55%218,7191%10,291,31164%47,7440%281,4252%140,7121%140,7121%$,246,98032%5,857,57336%16,148,884100%10/17/2007Page3of5ClevelandCliffsIncorporated:UnitedTaconiteBARTReport-<AppendixA>EmissionControlCostAnalysis<Table6>:SOxControl-WetScrubberCapitalRecoveryFactorsPrimaryInstallationInterestRateEquipmentLifeCRFReplacementCatalyst:EquipmentLifeCRF7.00%20years0.094420years0.0000o$tfe0ft30Costadjustedforfreight&salestaxReppartcostperunitAmountRequiredPackingCostInstallationLaborTotalInstalledCostAnnualizedCost0AssumeLabor15%ofcatalystcost(basislaborforbaghousereplacement)0ZerooutifnoreplacementpartsneededReplacementParts&Equipment:EquipmentLifeCRFReppartcostperunitAmountRequiredTotalRepPartsCostInstallationLaborTotalInstalledCostAnnualizedCostElectricalUseBlower,ScrubberCircPumpH20WWDischOtherTotalFlowacfm726,000Flow27,588gpm681gpmReagentUse&OtherOperatingCosts030.38110.00$each0Number0Costadjustedforfreight&salestax010minperbag(13hrtotal)Laborat$29.65/hr0Zerooutifnoreplacementpartsneeded0lJ.PInH20EfficiencyHp8.550.7LiquidSPGRlJ.Pf!H20EfficiencyHp1600.71600.7kW1,037.5kW444.511.01493.0OAQPSlistreplacementtimesfrom5-20minperbag.EPACostCon!Manual6thedSection5.2Chapter1Eq1.48EPACostContManual6thedSection5.2Chapter1Eq1.4fEPACostContManual6thedSection5.2Chapter1Eq1.49CausticUse632.17lb/hrS022.50lbNaOH/IbS021580.42lb/hrCausticLimeUseLiquid/Gasratio2632.17lb/hrS020.96lbLime/lbS0238.0•LIG=Gal/1,000acfCirculatingWaterRate27,588gpmWaterMakeup Rate/WWDisch32.0%ofcirculatingwaterrate+evap.lossEvaporationLoss4Slowdown=makeup-evap129gpm552gpm608.46lb/hrlime,limeadditionat1.1timesthestoichiometricratio681gpmP:\Mpls\23MN\69\2369A59UTACBART\WorkFiles\UTACcontrolcostss\UnitedTaconiteControlCosts(2007-10-17)EU042WetScrubber10/17/2007Page4of5ClevelandCliffsIncorporated:UnitedTaconiteBARTReport•<AppendixA>EmissionControlCostAnalysis<Table6>:SOxControl-WetScrubberOperatingCostCalculationsAnnualhoursofoperation:ItemOperatingLaborUnitCost$UnitofMeasureUtilizationRate:UseRateUnitofMeasureOpLabor45.31$/Hr0.5hr/8hrshiftSupervisor15%ofOp.MaintenanceMaintLabor47.22$/Hr0.5hr/8hrshiftMaintMtls100%ofMaintenanceLaborUtilities,Supplies,Replacements&WasteManagementElectricity0.040$/kwh1493.0kW-hrWaterWWTreatNeutralizatiorLime2.07$/kgal33.00$/kgal89.0$/ton681.2gpm551.8gpm608.5lb/hrAnnualUse*543NA543NA12,063,123330,239267,4822,4588,68893%AnnualCostComments24,603$/Hr,0.5hr/8hrshift,AnnualOperatingHours3,69015%ofOperatorCosts25,640$/Hr,0.5hr/8hrshift,AnnualOperatingHours25,640100%ofMaintenanceLabor482,525$/kwh,1,493kW-hr,annualoperatinghours,93%utilization683,595$/kgal,681gpm,annualoperatinghours,93%utilization8,826,899$/kgal,552gpm,annualoperatinghours,93%utilization218,719$/ton,6081b/hr,annualoperatinghours,93%utilization*annualuserateisinsameunitsofmeasurementastheunitcostfactorSeeSummarypagefornotesandassumptionsP:\Mpls\23MN\69\2369A59UTACBART\Workfiles\UTACcontrolcostss\UnitedTaconiteControlCosts(2007-10-17)EU042WetScrubber10/17/2007Page5of5Table13CostEstimateforReverseOsmosisSystemUnitedTaconiteLine2ScrubberSlowdown,552gpmPreparedByBarrEngineeringCompanyItemCapitalCostsTreatmentStage1Precipitation/SolidsManagementSolidsContactTankClarifierSodaAshSofteningTankClarifierSludgeStorageTanksSludgeDewateringEquipmentStage2ReverseOsmosisUltrafiltration(pre-treatment)ReverseOsmosisStage3BrineManagementSodaAshSofteningTankClarifierBrineEvaporatorBrineCrystallizerTreatmentProcessAccoutrementsConcretefoundationsTreatmentBuildingsPiping,Sch.40,10"Piping,Sch.40,4"ValvesandFittingsInstallationlaborElectricalServiceInstallationandControls(20%ofTreatmentEquipmentCost)LS$135,000LS$1,650,000LS$135,000LS$1,650,000LS$900,000LS$3,000,000LS$1,352,000LS$800,000LS$50,000LS$100,000LS$3,500,000LS$4,000,000Sub-totalforTreatmentEquipmentCY$1501,000SF$10012,000LF$251,200LF$101,200LS$20,0001HR$505,000LS$3,454,400Sub-totalforPumping/Piping,Electrical,andControlsSub-Total:CapitalCostsContingency(30percentofcaptialcosts)Sub-Total:CapitalCosts+ContingencyEngineering&AdministrationPilotTestingTreatmentDesign(15%ofTotalCapitalCost)ConstructionManagementFullScaleTechnicalAssistanceandStart-UpSub-total:Engineering&AdministrationTOTAL:CapitalEngineering&AdministrationLSLSMOLS$500,000$3,358,000$35,000$55,0001141$135,00030min.HRT,Liquid:Solid=1:1$1,650,000EPA,1976,adjustedtoJuly2007$135,00030min.HRT$1,650,000EPA,1976,adjustedtoJuly2007$900,0007days'storage@$1pergallon,$3,000,000EPA,1976,adjustedtoJuly2007,$1,352,0000.8MGD@$1.69pergpd$800,0000.8MGD@$1.00pergpd$50,000$100,000BasisforCostEstimate$3,500,000Vendorquote,100gpmbrineflowrate,80percentvolumereduction$4,000,000Vendorquote,fallingfilmdryer,drytosolidcrystals$17,272,000$150,000Means,PreviousProjectExperience$1,200,000Means,PreviousProjectExperience$30,000Means,PreviousProjectExperience$12,000Means,PreviousProjectExperience$20,000PreviousProjectExperience$250,000Assume10personCrewfor12Weeks$3,454,400PreviousProjectExperience$5,116,400$22,388,000$6,716,400$29,104,400$500,000Previous$3,358,000Previous$140,000Previous---,...,..;$;.;;5;;:;5.:.:;,0;.;0.;..0Previous$4,053,000$33157400ExperienceExperienceExperience(Approx100Hrs/month)ExperienceOperatingCostsProjectManagementOperatingLabor(assumes2personyears)Pumping0& MUltrafiltrationUnitO&MReverseOsmosisO&MElectricalCosts-Pumps(-200HPaverageovertheyear)EnergyCosts-EvaporatorsChemicalUsage-SodaAshChemicalUsage-SulfuricAcidSludgeLandfilling(IncludingTrucking)SaltLandfilling(includingtrucking)TOTAL:OperatingCostsLSHRLS1000GAL1000GALKW-HRgallonTonTonTonTon$10,0001$504,000$10,0001$0.50435,197$1.20435,197$0.041,307,000$0.0755,188,000$269346$100353$3537,823$3512,632$10,000$200,000$10,000$217,600$522,200$52,300$3,863,200$93,000$35,300$1,323,809$442,105$6,327,409CapitalRecoveryPreviousProjectExperiencePreviousProjectExperiencePreviousProjectExperience(Approx200Hrs/month)VendorEstimateVendorEstimate$0.04perKWH,200HPaverageannualusageVendorEstimateCaS04andCaC0320percentsolids,nonhazardouslocaltrans/tippingfee95percentsaltsolids,Na2S04,nonhazardous,localtrans/tippingfeeICapitalRecovery----$3,13o;OOOJCRF=0.0944,20years@7percentintereslOperatingCost$6,327,0001TotalAnllualCost(AnnualizedCapitalCost+-OperatingCost$9,5gooo1,-Total---·---$331References:EPAAreawideAssementProceduresManual:PerformanceandCost,EPA,1976