From: Beth Havlik

To: Aagenes, Jason D.

Cc: Roth, Todd D.; Davis, Todd E.; Paul Taylor; George Pruchnofski; Erik Boleman

Subject: RE: United Taconite - Status of Item 1 BART Analysis

Date: Tuesday, May 29, 2007 2:50:16 PM

Jason,

Here’s an update on Item 1 of your list as we discussed.

We have investigated what was included in wastewater treatment costs in the BART report. This

was a number that Utac provided, so for more certainty, we suggest you follow-up with Todd Nelson or

Brian Whitman of your Finance group. Our expectation is that this was the cost for existing water

treatment, and did not include special treatment for sulfates, fluorides or other constituents. We agree

that questions about the water discharge quality will need to be understood prior to going down the

path of adding an additional SO2 scrubber. Increased sulfate is a water quality issue that needs to be

considered for the tailings basin seepage because there is a wild rice water quality standard of 10 mg/l

sulfate and there is a sulfate aquatic toxicity moving-standard based on hardness . Also, the

MPCA alleges that sulfate increases methylation of mercury. Methylated mercury is believed to be

readily absorbed by fish. There is no mercury TMDL for the St Louis River, so an increase in sulfate

in the seeps may be banned as an expanded discharge related to current exceedences of mercury fish

tissue standards. Finally, there are other water quality standards that need to be addressed including

protection of wetlands for non-degradation and as well as miscellaneous others.

Regarding SO2 BART calculations, the pet coke blend fuel is highly culpable for SO2 emissions. The

relative emission levels are as follows:

 Pet coke blend: 3.8% S x 2000 lb/ton / 28.8 MM Btu/ton = 2.6 lb S/MM Btu x 64/32 = 5.2 lb

SO2/MM Btu

 Eastern Coal: 2.5% S x 2000 lb/ton / 24.5 MM Btu/ton = 1.5 lb S/MM Btu x 64/32 = 3.0 lb

SO2/MM Btu

 Western Coal: 0.5 % S x 2000 lb/ton / 20.5 MM Btu/ton = 0.5 lb S/MM Btu x 64/32 = 1.0 lb

SO2/MM Btu

The Eastern and Western coal composition is based on coal analyses and represents average values

for different eastern and western mines that Utac was investigating in 2005-2006. You may be able to

contract for coal properties above or below those average values.

The change in emissions of SO2 if Utac were to do the following:

a. Drop the pet coke and stay with same coal (Eastern?)

42% reduction in emissions due to fuel switch; 1586.4 tons per year

Cost per ton to add a secondary wet scrubber for an additional 60% control becomes

$5570/ton removed

b. Drop the pet coke and switch coal (western/PRB or other)

81% reduction in emissions due to fuel switch; 528.8 tons per year

Wet scrubber cost per ton becomes $16,700/ton removed.

This alternative would exceed the 60 percent reduction using the wet scrubber MPCA is

establishing as BART.

c. Revisit the BART analysis, i.e. cost per ton of SO2/NOX removal, using scenarios a. and

b. above. This modification may shift the MPCA’s BART cost/ton analysis above the

$5,000 - $8,000 threshold and remove the need for an additional scrubber installation.

See above for SO2 impact. Working on NOx.
d. Investigate the difference between MPCA’s SO2 cost/ton of $2,328 vs. Barr’s BART

analysis of $3,361 cost/ton.

I have a call in to Dick regarding the differences between our calculations. He has been

out of the office since last week and will be back in today.

Let me know if you have further questions.

Beth T. Havlik, P.E.

Vice President, Barr Engineering

4700 West 77th Street

Minneapolis, MN 55435-4803

800/632-2277 toll free

952/832-2640 phone

952/832-2601 fax

734/255-0269 mobile 

bhavlik@barr.com

From: Aagenes, Jason D. [mailto:JDAagenes@cleveland-cliffs.com] 

Sent: Friday, May 25, 2007 10:16 AM

To: Beth Havlik; Paul Taylor; George Pruchnofski; Erik Boleman

Cc: Roth, Todd D.; Davis, Todd E.

Subject: RE: United Taconite - BART Analysis and future production level meeting

Importance: High

All,

What’s the status of items 1 and 2 below? Please prepare a draft document for Item #2 below that

would we suitable for presentation to senior company officials by COB Wednesday May 30th. Please let

me know if this schedule is not possible.

Paul,

I’ll send you a pdf of the complete LHB report this morning.

From: Aagenes, Jason D. 

Sent: Monday, May 21, 2007 10:44 AM

To: 'Beth Havlik'

Cc: Paul Taylor (ptaylor@barr.com); George Pruchnofski; Erik Boleman; Roth, Todd D.; Davis, Todd E.

Subject: United Taconite - BART Analysis and future production level meeting

Beth,

Could you forward me a list of items that we discussed last week in St. Paul after the MPCA meeting?

I’d like to make sure we’re coordinated on a number of upcoming items:

1) High Priority – Need to start alternative discussions with MPCA ASAP – Please summarize

the change in emissions (NOx, SO2, etc.) if were to do the following:

a. Drop the pet coke and stay with same coal (Eastern?)

b. Drop the pet coke and switch coal (western/PRB or other)

c. Revisit the BART analysis, i.e. cost per ton of SO2/NOX removal, using scenarios a.

and b. above. This modification may shift the MPCA’s BART cost/ton analysis above

the $5,000 - $8,000 threshold and remove the need for an additional scrubber

installation.
d. Investigate the difference between MPCA’s SO2 cost/ton of $2,328 vs. Barr’s BART

analysis of $3,361 cost/ton.

2) Projects to increase production, burn coal on Line 1, and recover waste heat from coolers

(binary power generation):

a. We have a high level internal meeting scheduled on June 7th to scope out these

projects – need analysis that we discussed last week (PSD baseline calculations)

ASAP. Let me know if you need any data from me. Need to summarize the following:

 i. Current permitted production level – based on May 9th call, the consensus is

7.45 MLTPY with no equipment modifications/changes

 ii. Review of overall environmental challenges, limits, etc.

 iii. If we do modify the process, what are the incremental triggers for PSD,

environmental review, etc.?

 iv. What is the cost, level of effort, and timeline to permit the incremental

triggers?

 v. How would flux pellets affect permitting efforts?

 vi. Review and comment on LHB’s waste heat recovery project proposal. LHB

claims significant emissions reductions – PM, NOx, SO2, and even mercury

while increasing coal burn. I will forward a copy of the report to Paul.

3) Rod Mill Charger RFA – Erik/Paul to complete calcs, determine applicability, and complete

review document.

4) Updated Production data – Paul, please send me a list of what data I need to provide to you

so that your production spreadsheet remains current.

Jason Aagenes

Section Manager - Environmental Affairs

Cleveland-Cliffs United Taconite LLC

P.O. Box 180

Eveleth, MN 55734

Office (218) 744-7803

Mobile (218) 290 -5936

Fax (218) 744-7647

jdaagenes@cleveland-cliffs.com

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