Cleveland Cliffs Incorporated: Hibbing Taconite

BART Report - Appendix A Emission Control Cost Analysis

Table 1: Cost Summary

NOx Control Cost Summary

Control Technology Control Eff % Controlled Emissions T/y Emission Reduction T/yr Installed Capital Cost $ Total Annual Cost $/yr Pollution Control Cost $/ton

Selective Catalytic Reduction (SCR) with Reheat

Pellet Indurating Furnace Line No 1 80% 415.2 2,082.6 $80,957,276 $42,647,613 $20,478

Pellet Indurating Furnace Line No 2 80% 344.5 1,799.1 $78,666,631 $40,222,018 $22,357

Pellet Indurating Furnace Line No 3 80% 415.2 1,832.0 $83,052,744 $40,685,307 $22,208

SO2 Control Cost Summary

Control Technology Control Eff % Controlled Emissions T/y Emission Reduction T/yr Installed Capital Cost $ Total Annual Cost $/yr Pollution Control Cost $/ton

Wet Walled Electrostatic Precipitator (WWESP)Pellet Indurating Furnace Line No 1 80% 40.4 161.8 $42,951,640 $9,337,928 $57,723

Pellet Indurating Furnace Line No 2 80% 35.9 143.6 $43,604,738 $9,559,244 $66,582Pellet Indurating Furnace Line No 3 80% 37.6 150.5 $44,500,959 $9,848,188 $65,434Wet Scrubber (Additional)

Pellet Indurating Furnace Line No 1 60% 80.9 121.3 $28,888,911 $4,460,257 $36,762

Pellet Indurating Furnace Line No 2 60% 80.9 121.3 $28,888,911 $4,460,257 $36,762Pellet Indurating Furnace Line No 3 60% 80.9 121.3 $28,888,911 $4,460,257 $36,762

E:\BART\HTC\HTC Control Costs.xls

Cost Summary 
Cleveland Cliffs Incorporated: Hibbing Taconite

BART Report - Appendix A Emission Control Cost Analysis

Table 2: - Summary of Utility, Chemical and Supply Costs

Operating Unit: Pellet Indurating Furnace Line No 1 Study Year 2006

Emission Unit Number EU 020

Stack/Vent Number SV021M-SV024M

Operating Unit: Pellet Indurating Furnace Line No 2

Emission Unit Number EU 021

Stack/Vent Number SV025M-SV028M

Operating Unit: Pellet Indurating Furnace Line No 3 7439.858594

Emission Unit Number EU 022

Stack/Vent Number SV029M-SV032M

Reference

Item Unit Cost Units Cost Year Data Source Notes

Operating Labor 48.30 $/hr 2006 Site Specific - Hibbing Taconite.

Maintenance Labor 60.00 $/hr 2006 Site Specific - Hibbing Taconite. Construction Labor Rate.

Electricity 0.0410 $/kwh 2006 Site Specific - Hibbing Taconite. Purchased Cost.

Natural Gas 7.41 $/mscf 2006 Site Specific - Hibbing Taconite.

Indurating cost: $7.41/mcf or $7.30/M

Heating cost: $7.72/mcf or $7.61/MMB

Water 0.28 $/mgal 0.20 1995

EPA Air Pollution Control Cost Manual, 6th

Ed 2002, Section 5 Ch 1, page 1-40.

Annual Costs for Packed Tower Abso

adjusted for 3% inflation.

Cooling Water 0.28 $/mgal 0.23 1999

EPA Air Pollution Control Cost Manual, 6th

ed. Section 3.1 Ch 1.

Ch 1 Carbon Absorbers, 1999 $0.15 

3% inflation.

Compressed Air 0.32 $/mscf 0.25 1998

EPA Air Pollution Control Cost Manual 6th Ed2002, Section 6 Chapter 1 .

Example problem; Dried & Filtered, C

inflation.

Wastewater Disposal Neutralization 1.69 $/mgal 1.50 2002

EPA Air Pollution Control Cost Manual 6th Ed2002, Section 2 Chapter 2.5.5.5.

Section 2 lists $1- $2/1000 gal. Cost 3 lists $1.30 - $2.15/1,000 gal.

Chemicals & Supplies

Lime 90.33 $/ton 90.33 2006 Estimate from Cutler-Magney Company.

Oxygen 40.00 $/ton 2006 BOC estimate.

Ammonia (29% aqua.) 0.12 $/lb 0.101 2000

EPA Air Pollution Control Cost Manual 6th Ed2002, Section 5 Chapter 2, page 2-50.

Annual costs for a retrofit SCR system 

adjusted for 3% inflation.

Caustic 305.96 $/ton 280 2003 Hawkins Chemical 50% solution (50 Deg Be); includes de

Other

Sales Tax 6.5% %

Interest Rate 7.00% %

EPA Air Pollution Control Cost Manual

Introduction, Chapter 2, section 2.4.2. Social (discount) rate used as a defau

Operating InformationAnnual Op. Hrs 8000 Hours Engineering Estimate.

Utilization Rate 93%

Equipment Life 20 yrs Engineering Estimate.

Standardized Flow Rate

SV021M-SV024M 654,869 scfm @ 32o F Calculated.

SV025M-SV028M 674,379 scfm @ 32o F Calculated.

SV029M-SV032M 701,524 scfm @ 32o F Calculated.

E:\BART\HTC\HTC Control Costs.xls

Utility Chem$ Data 
Reference

Item Unit Cost Units Cost Year Data Source Notes

Temperature

SV021M-SV024M 120 Deg F BART spreadsheet. Range is 90 - 120 °F

SV025M-SV028M 120 Deg F BART spreadsheet. Range is 90 - 120 °F

SV029M-SV032M 120 Deg F BART spreadsheet. Range is 90 - 120 °F

Moisture Content

SV021M-SV024M 7.4% 2005

Y:\23\69\951 Hibbing Taconite Stack

test\Hibbtac 05. Average from test results in: SV021-S

SV025M-SV028M 7.1% 2004

Y:\23\69\870 Hibbtac Title V Stack

Testing\Data\Furnace L2. Average from test results in: SV025 - 

SV029M-SV032M 8.5% 2005

Y:\23\69\951 Hibbing Taconite Stack

test\Hibbtac 05 Week Two. Average from test results in: SV029 - 

Actual Flow RateSV021M-SV024M 772,000 acfm BART spreadsheet.

SV025M-SV028M 795,000 acfm BART spreadsheet.

SV029M-SV032M 827,000 acfm BART spreadsheet.

Standardized Flow Rate

SV021M-SV024M 702,786 scfm @ 68o F Calculated.

SV025M-SV028M 723,724 scfm @ 68o F Calculated.

SV029M-SV032M 752,855 scfm @ 68o F Calculated.

Dry Std Flow Rate

SV021M-SV024M 650,745 dscfm @ 68o F Calculated.

SV025M-SV028M 672,448 dscfm @ 68o F Calculated.

SV029M-SV032M 689,013 dscfm @ 68o F Calculated.

Max Emis Actual Emissions lb/hr ton/year

Pollutant Lb/Hr Ton/year ppmv ppmv

Nitrous Oxides (NOx) ('04&'05 Max plus 10%)

SV021M-SV024M 558.0 2,497.7 120 122.2 2005 plus 10%

SV025M-SV028M 463.0 2,143.5 96 101.5 2004 plus 10%

SV029M-SV032M 526.0 2,247.1 106 103.8 2004 plus 10%

Sulfur Dioxides (SO2)

SV021M-SV024M 30.0 202.2 5 7.1 2004 plus 10%

SV025M-SV028M 38.0 179.5 6 6.1 2004 plus 10%

SV029M-SV032M 43.0 188.1 6 6.2 2004 plus 10%

estimate

calculated value

known or assumed data

required data

E:\BART\HTC\HTC Control Costs.xls

Utility Chem$ Data 
Cleveland Cliffs Incorporated: Hibbing Taconite

BART Report - Appendix A Emission Control Cost Analysis

Table 3: SO2 Control - Wet Walled Electrostatic Precipitator

Operating Unit: Pellet Indurating Furnace Line No 1

Emission Unit Number EU 020 Stack/Vent Number SV021M-SV024M

Standardized Flow Rate 654,869 scfm @ 32o F

Expected Utilization Rate 93% Temperature 120 Deg F

Expected Annual Hours of Operation 8,000 Hours Moisture Content 7.4%

Annual Interest Rate 7.0% Actual Flow Rate7439.85859 772,000 acfm

Expected Equipment Life 20 yrs Standardized Flow Rate 702,786 scfm @ 68o F

Dry Std Flow Rate 650,745 dscfm @ 68o F

CONTROL EQUIPMENT COSTS

Capital Costs

Direct Capital Costs

Purchased Equipment (A) 8,439,806

Purchased Equipment Total (B) 22% of control device cost (A) 10,254,364

Installation - Standard Costs 67% of purchased equip cost (B) 6,870,424

Installation - Site Specific Costs 6,200,000

Installation Total 6,870,424

Total Direct Capital Cost, DC 17,124,788

Total Indirect Capital Costs, IC 57% of purchased equip cost (B) 5,844,987

Total Capital Investment (TCI) = DC + IC 42,951,640

Operating Costs

Total Annual Direct Operating Costs Labor, supervision, materials, replacement parts, utilities, etc. 4,238,475

Total Annual Indirect Operating Costs Sum indirect oper costs + capital recovery cost 5,099,453

Total Annual Cost (Annualized Capital Cost + Operating Cost) 9,337,928

Actual

Emission Control Cost Calculation Emisssions

Max Emis Annual Cont Eff Cont Emis Reduction Cont Cost

Pollutant Lb/Hr T/Yr % T/yr T/yr $/Ton Rem

Nitrous Oxides (NOx) 558.0 2,497.7 0% 2497.7 - NA

Sulfur Dioxide (SO2) 30.0 202.2 80% 40.4 161.8 57,723

Notes & Assumptions

1 Calculations per EPA Air Pollution Control Cost Manual 6th Ed 2002, Section 6 Chapter 3.

2 Original estimate from Durr. Used 0.6 power law factor to adjust price to stack flow rate acfm from bid basis of 291,000 acfm.

4 Ammonia usage based on estimate from Vogt Power and scaled linearly using stack flow rate.

E:\BART\HTC\HTC Control Costs.xls

EU020 WWESP 9/1/2006 Page 4 of 42
Cleveland Cliffs Incorporated: Hibbing Taconite

BART Report - Appendix A Emission Control Cost Analysis

Table 3: SO2 Control - Wet Walled Electrostatic Precipitator

CAPITAL COSTS

Direct Capital Costs

Purchased Equipment (A)

1

Purchased Equipment Costs (A)

2

- ESP + auxiliary equipment 8,439,806

Instrumentation 10% of control device cost (A) 843,981

MN Sales Taxes 6.5% of control device cost (A) 548,587

Freight 5% of control device cost (A) 421,990

Purchased Equipment Total (B) 22% 10,254,364

Installation

Foundations & supports 4% of purchased equip cost (B) 410,175

Handling & erection 50% of purchased equip cost (B) 5,127,182

Electrical 8% of purchased equip cost (B) 820,349

Piping 1% of purchased equip cost (B) 102,544

Insulation 2% of purchased equip cost (B) 205,087

Painting 2% of purchased equip cost (B) 205,087

Installation Subtotal Standard Expenses 67% 6,870,424

Total Direct Capital Cost, DC 17,124,788

Indirect Capital Costs

Engineering, supervision 20% of purchased equip cost (B) 2,050,873

Construction & field expenses 20% of purchased equip cost (B) 2,050,873

Contractor fees 10% of purchased equip cost (B) 1,025,436

Start-up 1% of purchased equip cost (B) 102,544

Performance test 1% of purchased equip cost (B) 102,544

Model Studies 2% of purchased equip cost (B) 205,087

Contingencies 3% of purchased equip cost (B) 307,631

Total Indirect Capital Costs, IC 57% of purchased equip cost (B) 5,844,987

Total Capital Investment (TCI) = DC + IC 22,969,775

Retrofit multiplier

3

60% of TCI 13,781,865

Sitework and foundations Site Specific 1,400,000

Structural steel Site Specific 4,800,000

Site Specific - Other Site Specific NA

Total Site Specific Costs 6,200,000

Total Capital Investment (TCI) Retrofit Installed 42,951,640

OPERATING COSTS

Direct Annual Operating Costs, DC

Operating Labor

Operator 48.30 $/Hr, 2.0 hr/8 hr shift, Annual Operating Hours 96,600

Supervisor 15% 15% of Operator Costs 14,490

Maintenance

Maintenance Labor 60.00 $/Hr, 15.0 hr/wk, Annual Operating Hours 15,063

Maintenance Materials 1.00 % of Maintenance Labor 84,398

Utilities, Supplies, Replacements & Waste Management

Electricity 0.04 $/kwh, 1,824 kW-hr, Annual Operating Hours,93% utilization 556,471

Water 0.28 $/mgal, 3,860 gpm, Annual Operating Hours,93% utilization 477,036

WW Treat Neutralization 1.69 $/mgal, 3,860 gpm, Annual Operating Hours,93% utilization 2,909,053

Caustic 305.96 $/ton, 75 lb/hr, Annual Operating Hours,93% utilization 85,364

Total Annual Direct Operating Costs 4,238,475

Indirect Operating Costs

Overhead 60% of total labor and material costs 126,331

Administration (2% total capital costs) 2% of total capital costs (TCI) 459,395

Property tax (1% total capital costs) 1% of total capital costs (TCI) 229,698

Insurance (1% total capital costs) 1% of total capital costs (TCI) 229,698

Capital Recovery 0.0944 for a 20- year equipment life and a 7% interest rate 4,054,331

Total Annual Indirect Operating Costs Sum indirect oper costs + capital recovery cost 5,099,453

Total Annual Cost (Annualized Capital Cost + Operating Cost) 9,337,928

See summary page for notes and assumptions

E:\BART\HTC\HTC Control Costs.xls

EU020 WWESP 9/1/2006 Page 5 of 42
Cleveland Cliffs Incorporated: Hibbing Taconite

BART Report - Appendix A Emission Control Cost Analysis

Table 3: SO2 Control - Wet Walled Electrostatic Precipitator

Capital Recovery Factors

Primary Installation

Interest Rate 7.00%

Equipment Life 20 years

CRF 0.0944

Replacement Parts & Equipment:

Equipment Life 3

CRF 0.3811

Rep part cost per unit

Amount Required 0

Total Rep Parts Cost 0

Installation Labor 0

Total Installed Cost 0

Annualized Cost 0

Electrical Use

Flow acfm D P in H2O kW

Fan Power 772,000 10 1,397.3 EPA Cont Cost Manual 6th ed - Sec 6 Ch 3 Eq 3.46

Fluid Head (ft) Pump Eff.

Pump Power 60 60% 72.7 EPA Cont Cost Manual 6th ed - Sec 6 Ch 3 Eq 3.47

Plate Area

ESP Power 182,587 354.2 EPA Cont Cost Manual 6th ed - Sec 6 Ch 3 Eq 3.48

Total 1,824.3

Reagent Use & Other Operating Costs

gpm

Water 5.00 gal/min-kacfm 3860.00 EPA Cont Cost Manual 6th ed - Sec 6 Ch 3.4.1.6

lb/hr

Reagent Use 2.50 lb NaOH/lb SO2 75.00 lb/hr caustic

Operating Cost Calculations Annual hours of operation: 8,000

Utilization Rate: 93.0%

Unit Unit of Use Unit of Annual Annual Comments

Item Cost $ Measure Rate Measure Use* Cost

Operating Labor

Op Labor 48.3 $/Hr 2.0 hr/8 hr shift 2,000 96,600 $/Hr, 2.0 hr/8 hr shift, Annual Operating Hours

Supervisor 15% of Op. NA 14,490 15% of Operator Costs

Maintenance

Maint Labor 60.00 $/Hr 15.0 hr/wk 660 15,063 $/Hr, 15.0 hr/wk, Annual Operating Hours

Maint Mtls 1 % of Purchase Cost NA 84,398 EPA Cont Cost Manual 6th ed - Sec 6 Ch 3.4.1.1

Utilities, Supplies, Replacements & Waste Management

Electricity 0.041 $/kwh 1824.3 kW-hr 13,572,461 556,471 $/kwh, 1,824 kW-hr, Annual Operating Hours,93% utilization

Water 0.28 $/mgal 3,860.0 gpm 1,723,104 477,036 $/mgal, 3,860 gpm, Annual Operating Hours,93% utilization

WW Treat Neutralization 1.69 $/mgal 3,860.0 gpm 1,723,104 2,909,053 $/mgal, 3,860 gpm, Annual Operating Hours,93% utilization

Caustic 305.96 $/ton 75.0 lb/hr 279 85,364 $/ton, 75 lb/hr, Annual Operating Hours,93% utilization

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

See summary page for notes and assumptions

E:\BART\HTC\HTC Control Costs.xls

EU020 WWESP 9/1/2006 Page 6 of 42
Cleveland Cliffs Incorporated: Hibbing Taconite

BART Report - Appendix A Emission Control Cost Analysis

Table 4: SO2 Control - Wet Walled Electrostatic Precipitator

Operating Unit: Pellet Indurating Furnace Line No 2

Emission Unit Number EU 021 Stack/Vent Number SV025M-SV028M

Standardized Flow Rate 674,379 scfm @ 32o F

Expected Utilization Rate 93% Temperature 120 Deg F

Expected Annual Hours of Operation 8,000 Hours Moisture Content 7.1%

Annual Interest Rate 7.0% Actual Flow Rate7439.85859 795,000 acfm

Expected Equipment Life 20 yrs Standardized Flow Rate 723,724 scfm @ 68o F

Dry Std Flow Rate 672,448 dscfm @ 68o F

CONTROL EQUIPMENT COSTS

Capital Costs

Direct Capital Costs

Purchased Equipment (A) 8,589,786

Purchased Equipment Total (B) 22% of control device cost (A) 10,436,590

Installation - Standard Costs 67% of purchased equip cost (B) 6,992,515

Installation - Site Specific Costs 6,200,000

Installation Total 6,992,515

Total Direct Capital Cost, DC 17,429,105

Total Indirect Capital Costs, IC 57% of purchased equip cost (B) 5,948,856

Total Capital Investment (TCI) = DC + IC 43,604,738

Operating Costs

Total Annual Direct Operating Costs Labor, supervision, materials, replacement parts, utilities, etc. 4,380,647

Total Annual Indirect Operating Costs Sum indirect oper costs + capital recovery cost 5,178,597

Total Annual Cost (Annualized Capital Cost + Operating Cost) 9,559,244

Actual

Emission Control Cost Calculation Emisssions

Max Emis Annual Cont Eff Cont Emis Reduction Cont Cost

Pollutant Lb/Hr T/Yr % T/yr T/yr $/Ton Rem

Nitrous Oxides (NOx) 463.0 2,143.5 0% 2143.5 - NA

Sulfur Dioxide (SO2) 38.0 179.5 80% 35.9 143.6 66,582

Notes & Assumptions

1 Calculations per EPA Air Pollution Control Cost Manual 6th Ed 2002, Section 6 Chapter 3.

2 Original estimate from Durr. Used 0.6 power law factor to adjust price to stack flow rate acfm from bid basis of 291,000 acfm.

3 CUECost Workbook Version 1.0, USEPA Document Page 2.

E:\BART\HTC\HTC Control Costs.xls

EU021 WWESP 9/1/2006 Page 7 of 42
Cleveland Cliffs Incorporated: Hibbing Taconite

BART Report - Appendix A Emission Control Cost Analysis

Table 4: SO2 Control - Wet Walled Electrostatic Precipitator

CAPITAL COSTS

Direct Capital Costs

Purchased Equipment (A)

1

Purchased Equipment Costs (A)

2

- ESP + auxiliary equipment 8,589,786

Instrumentation 10% of control device cost (A) 858,979

MN Sales Taxes 6.5% of control device cost (A) 558,336

Freight 5% of control device cost (A) 429,489

Purchased Equipment Total (B) 22% 10,436,590

Installation

Foundations & supports 4% of purchased equip cost (B) 417,464

Handling & erection 50% of purchased equip cost (B) 5,218,295

Electrical 8% of purchased equip cost (B) 834,927

Piping 1% of purchased equip cost (B) 104,366

Insulation 2% of purchased equip cost (B) 208,732

Painting 2% of purchased equip cost (B) 208,732

Installation Subtotal Standard Expenses 67% 6,992,515

Total Direct Capital Cost, DC 17,429,105

Indirect Capital Costs

Engineering, supervision 20% of purchased equip cost (B) 2,087,318

Construction & field expenses 20% of purchased equip cost (B) 2,087,318

Contractor fees 10% of purchased equip cost (B) 1,043,659

Start-up 1% of purchased equip cost (B) 104,366

Performance test 1% of purchased equip cost (B) 104,366

Model Studies 2% of purchased equip cost (B) 208,732

Contingencies 3% of purchased equip cost (B) 313,098

Total Indirect Capital Costs, IC 57% of purchased equip cost (B) 5,948,856

Total Capital Investment (TCI) = DC + IC 23,377,961

Retrofit multiplier

3

60% of TCI 14,026,777

Sitework and foundations Site Specific 1,400,000

Structural steel Site Specific 4,800,000

Site Specific - Other Site Specific NA

Total Site Specific Costs 6,200,000

Total Capital Investment (TCI) Retrofit Installed 43,604,738

OPERATING COSTS

Direct Annual Operating Costs, DC

Operating Labor

Operator 48.30 $/Hr, 2.0 hr/8 hr shift, Annual Operating Hours 96,600

Supervisor 15% 15% of Operator Costs 14,490

Maintenance

Maintenance Labor 60.00 $/Hr, 15.0 hr/wk, Annual Operating Hours 15,512

Maintenance Materials 1.00 % of Maintenance Labor 85,898

Utilities, Supplies, Replacements & Waste Management

Electricity 0.04 $/kwh, 1,879 kW-hr, Annual Operating Hours,93% utilization 573,050

Water 0.28 $/mgal, 3,975 gpm, Annual Operating Hours,93% utilization 491,248

WW Treat Neutralization 1.69 $/mgal, 3,975 gpm, Annual Operating Hours,93% utilization 2,995,722

Caustic 305.96 $/ton, 95 lb/hr, Annual Operating Hours,93% utilization 108,128

Total Annual Direct Operating Costs 4,380,647

Indirect Operating Costs

Overhead 60% of total labor and material costs 127,500

Administration (2% total capital costs) 2% of total capital costs (TCI) 467,559

Property tax (1% total capital costs) 1% of total capital costs (TCI) 233,780

Insurance (1% total capital costs) 1% of total capital costs (TCI) 233,780

Capital Recovery 0.0944 for a 20- year equipment life and a 7% interest rate 4,115,979

Total Annual Indirect Operating Costs Sum indirect oper costs + capital recovery cost 5,178,597

Total Annual Cost (Annualized Capital Cost + Operating Cost) 9,559,244

See summary page for notes and assumptions

E:\BART\HTC\HTC Control Costs.xls

EU021 WWESP 9/1/2006 Page 8 of 42
Cleveland Cliffs Incorporated: Hibbing Taconite

BART Report - Appendix A Emission Control Cost Analysis

Table 4: SO2 Control - Wet Walled Electrostatic Precipitator

Capital Recovery Factors

Primary Installation

Interest Rate 7.00%

Equipment Life 20 years

CRF 0.0944

Replacement Parts & Equipment:

Equipment Life 3

CRF 0.3811

Rep part cost per unit

Amount Required 0

Total Rep Parts Cost 0

Installation Labor 0

Total Installed Cost 0

Annualized Cost 0

Electrical Use

Flow acfm D P in H2O kW

Fan Power 795,000 10 1,439.0 EPA Cont Cost Manual 6th ed - Sec 6 Ch 3 Eq 3.46

Fluid Head (ft) Pump Eff.

Pump Power 60 60% 74.9 EPA Cont Cost Manual 6th ed - Sec 6 Ch 3 Eq 3.47

Plate Area

ESP Power 188,027 364.8 EPA Cont Cost Manual 6th ed - Sec 6 Ch 3 Eq 3.48

Total 1,878.6

Reagent Use & Other Operating Costs

gpm

Water 5.00 gal/min-kacfm 3975.00 EPA Cont Cost Manual 6th ed - Sec 6 Ch 3.4.1.6

lb/hr

Reagent Use 2.50 lb NaOH/lb SO2 95.00 lb/hr caustic

Operating Cost Calculations Annual hours of operation: 8,000

Utilization Rate: 93.0%

Unit Unit of Use Unit of Annual Annual Comments

Item Cost $ Measure Rate Measure Use* Cost

Operating Labor

Op Labor 48.3 $/Hr 2.0 hr/8 hr shift 2,000 96,600 $/Hr, 2.0 hr/8 hr shift, Annual Operating Hours

Supervisor 15% of Op. NA 14,490 15% of Operator Costs

Maintenance

Maint Labor 60.00 $/Hr 15.0 hr/wk 660 15,512 $/Hr, 15.0 hr/wk, Annual Operating Hours

Maint Mtls 1 % of Purchase Cost NA 85,898 EPA Cont Cost Manual 6th ed - Sec 6 Ch 3.4.1.1

Utilities, Supplies, Replacements & Waste Management

Electricity 0.041 $/kwh 1878.6 kW-hr 13,976,822 573,050 $/kwh, 1,879 kW-hr, Annual Operating Hours,93% utilization

Water 0.28 $/mgal 3,975.0 gpm 1,774,440 491,248 $/mgal, 3,975 gpm, Annual Operating Hours,93% utilization

WW Treat Neutralization 1.69 $/mgal 3,975.0 gpm 1,774,440 2,995,722 $/mgal, 3,975 gpm, Annual Operating Hours,93% utilization

Caustic 305.96 $/ton 95.0 lb/hr 353 108,128 $/ton, 95 lb/hr, Annual Operating Hours,93% utilization

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

See summary page for notes and assumptions

E:\BART\HTC\HTC Control Costs.xls

EU021 WWESP 9/1/2006 Page 9 of 42
Cleveland Cliffs Incorporated: Hibbing Taconite

BART Report - Appendix A Emission Control Cost Analysis

Table 5: SO2 Control - Wet Walled Electrostatic Precipitator

Operating Unit: Pellet Indurating Furnace Line No 3

Emission Unit Number EU 022 Stack/Vent Number SV029M-SV032M

Standardized Flow Rate 701,524 scfm @ 32o F

Expected Utilization Rate 93% Temperature 120 Deg F

Expected Annual Hours of Operation 8,000 Hours Moisture Content 8.5%

Annual Interest Rate 7.0% Actual Flow Rate7439.85859 827,000 acfm

Expected Equipment Life 20 yrs Standardized Flow Rate 752,855 scfm @ 68o F

Dry Std Flow Rate 689,013 dscfm @ 68o F

CONTROL EQUIPMENT COSTS

Capital Costs

Direct Capital Costs

Purchased Equipment (A) 8,795,598

Purchased Equipment Total (B) 22% of control device cost (A) 10,686,652

Installation - Standard Costs 67% of purchased equip cost (B) 7,160,057

Installation - Site Specific Costs 6,200,000

Installation Total 7,160,057

Total Direct Capital Cost, DC 17,846,708

Total Indirect Capital Costs, IC 57% of purchased equip cost (B) 6,091,391

Total Capital Investment (TCI) = DC + IC 44,500,959

Operating Costs

Total Annual Direct Operating Costs Labor, supervision, materials, replacement parts, utilities, etc. 4,560,979

Total Annual Indirect Operating Costs Sum indirect oper costs + capital recovery cost 5,287,209

Total Annual Cost (Annualized Capital Cost + Operating Cost) 9,848,188

Actual

Emission Control Cost Calculation Emisssions

Max Emis Annual Cont Eff Cont Emis Reduction Cont Cost

Pollutant Lb/Hr T/Yr % T/yr T/yr $/Ton Rem

Nitrous Oxides (NOx) 526.0 2,247.1 0% 2247.1 - NA

Sulfur Dioxide (SO2) 43.0 188.1 80% 37.6 150.5 65,434

Notes & Assumptions

1 Calculations per EPA Air Pollution Control Cost Manual 6th Ed 2002, Section 6 Chapter 3.

2 Original estimate from Durr. Used 0.6 power law factor to adjust price to stack flow rate acfm from bid basis of 291,000 acfm.

3 CUECost Workbook Version 1.0, USEPA Document Page 2.

E:\BART\HTC\HTC Control Costs.xls

EU022 WWESP 9/1/2006 Page 10 of 42
Cleveland Cliffs Incorporated: Hibbing Taconite

BART Report - Appendix A Emission Control Cost Analysis

Table 5: SO2 Control - Wet Walled Electrostatic Precipitator

CAPITAL COSTS

Direct Capital Costs

Purchased Equipment (A)

1

Purchased Equipment Costs (A)

2

- ESP + auxiliary equipment 8,795,598

Instrumentation 10% of control device cost (A) 879,560

MN Sales Taxes 6.5% of control device cost (A) 571,714

Freight 5% of control device cost (A) 439,780

Purchased Equipment Total (B) 22% 10,686,652

Installation

Foundations & supports 4% of purchased equip cost (B) 427,466

Handling & erection 50% of purchased equip cost (B) 5,343,326

Electrical 8% of purchased equip cost (B) 854,932

Piping 1% of purchased equip cost (B) 106,867

Insulation 2% of purchased equip cost (B) 213,733

Painting 2% of purchased equip cost (B) 213,733

Installation Subtotal Standard Expenses 67% 7,160,057

Total Direct Capital Cost, DC 17,846,708

Indirect Capital Costs

Engineering, supervision 20% of purchased equip cost (B) 2,137,330

Construction & field expenses 20% of purchased equip cost (B) 2,137,330

Contractor fees 10% of purchased equip cost (B) 1,068,665

Start-up 1% of purchased equip cost (B) 106,867

Performance test 1% of purchased equip cost (B) 106,867

Model Studies 2% of purchased equip cost (B) 213,733

Contingencies 3% of purchased equip cost (B) 320,600

Total Indirect Capital Costs, IC 57% of purchased equip cost (B) 6,091,391

Total Capital Investment (TCI) = DC + IC 23,938,099

Retrofit multiplier

3

60% of TCI 14,362,860

Sitework and foundations Site Specific 1,400,000

Structural steel Site Specific 4,800,000

Site Specific - Other Site Specific NA

Total Site Specific Costs 6,200,000

Total Capital Investment (TCI) Retrofit Installed 44,500,959

OPERATING COSTS

Direct Annual Operating Costs, DC

Operating Labor

Operator 48.30 $/Hr, 2.0 hr/8 hr shift, Annual Operating Hours 96,600

Supervisor 15% 15% of Operator Costs 14,490

Maintenance

Maintenance Labor 60.00 $/Hr, 15.0 hr/wk, Annual Operating Hours 16,137

Maintenance Materials 1.00 % of Maintenance Labor 87,956

Utilities, Supplies, Replacements & Waste Management

Electricity 0.04 $/kwh, 1,954 kW-hr, Annual Operating Hours,93% utilization 596,116

Water 0.28 $/mgal, 4,135 gpm, Annual Operating Hours,93% utilization 511,021

WW Treat Neutralization 1.69 $/mgal, 4,135 gpm, Annual Operating Hours,93% utilization 3,116,304

Caustic 305.96 $/ton, 108 lb/hr, Annual Operating Hours,93% utilization 122,355

Total Annual Direct Operating Costs 4,560,979

Indirect Operating Costs

Overhead 60% of total labor and material costs 129,110

Administration (2% total capital costs) 2% of total capital costs (TCI) 478,762

Property tax (1% total capital costs) 1% of total capital costs (TCI) 239,381

Insurance (1% total capital costs) 1% of total capital costs (TCI) 239,381

Capital Recovery 0.0944 for a 20- year equipment life and a 7% interest rate 4,200,576

Total Annual Indirect Operating Costs Sum indirect oper costs + capital recovery cost 5,287,209

Total Annual Cost (Annualized Capital Cost + Operating Cost) 9,848,188

See summary page for notes and assumptions

E:\BART\HTC\HTC Control Costs.xls

EU022 WWESP 9/1/2006 Page 11 of 42
Cleveland Cliffs Incorporated: Hibbing Taconite

BART Report - Appendix A Emission Control Cost Analysis

Table 5: SO2 Control - Wet Walled Electrostatic Precipitator

Capital Recovery Factors

Primary Installation

Interest Rate 7.00%

Equipment Life 20 years

CRF 0.0944

Replacement Parts & Equipment:

Equipment Life 3

CRF 0.3811

Rep part cost per unit

Amount Required 0

Total Rep Parts Cost 0

Installation Labor 0

Total Installed Cost 0

Annualized Cost 0

Electrical Use

Flow acfm D P in H2O kW

Fan Power 827,000 10 1,496.9 EPA Cont Cost Manual 6th ed - Sec 6 Ch 3 Eq 3.46

Fluid Head (ft) Pump Eff.

Pump Power 60 60% 77.9 EPA Cont Cost Manual 6th ed - Sec 6 Ch 3 Eq 3.47

Plate Area

ESP Power 195,595 379.5 EPA Cont Cost Manual 6th ed - Sec 6 Ch 3 Eq 3.48

Total 1,954.2

Reagent Use & Other Operating Costs

gpm

Water 5.00 gal/min-kacfm 4135.00 EPA Cont Cost Manual 6th ed - Sec 6 Ch 3.4.1.6

lb/hr

Reagent Use 2.50 lb NaOH/lb SO2 107.50 lb/hr caustic

Operating Cost Calculations Annual hours of operation: 8,000

Utilization Rate: 93.0%

Unit Unit of Use Unit of Annual Annual Comments

Item Cost $ Measure Rate Measure Use* Cost

Operating Labor

Op Labor 48.3 $/Hr 2.0 hr/8 hr shift 2,000 96,600 $/Hr, 2.0 hr/8 hr shift, Annual Operating Hours

Supervisor 15% of Op. NA 14,490 15% of Operator Costs

Maintenance

Maint Labor 60.00 $/Hr 15.0 hr/wk 660 16,137 $/Hr, 15.0 hr/wk, Annual Operating Hours

Maint Mtls 1 % of Purchase Cost NA 87,956 EPA Cont Cost Manual 6th ed - Sec 6 Ch 3.4.1.1

Utilities, Supplies, Replacements & Waste Management

Electricity 0.041 $/kwh 1954.2 kW-hr 14,539,411 596,116 $/kwh, 1,954 kW-hr, Annual Operating Hours,93% utilization

Water 0.28 $/mgal 4,135.0 gpm 1,845,864 511,021 $/mgal, 4,135 gpm, Annual Operating Hours,93% utilization

WW Treat Neutralization 1.69 $/mgal 4,135.0 gpm 1,845,864 3,116,304 $/mgal, 4,135 gpm, Annual Operating Hours,93% utilization

Caustic 305.96 $/ton 107.5 lb/hr 400 122,355 $/ton, 108 lb/hr, Annual Operating Hours,93% utilization

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

See summary page for notes and assumptions

E:\BART\HTC\HTC Control Costs.xls

EU022 WWESP 9/1/2006 Page 12 of 42
Cleveland Cliffs Incorporated: Hibbing Taconite

BART Report - Appendix A Emission Control Cost Analysis

Table 6: SOx Control - Wet Scrubber

Operating Unit: Pellet Indurating Furnace Line No 1

Emission Unit Number EU 020 Stack/Vent Number SV021M-SV024M

Standardized Flow Rate 654,869 scfm @ 32o F

Expected Utilization Rate 93% Temperature 120 Deg F

Expected Annual Hours of Operation 8,000 Hours Moisture Content 7.4%

Annual Interest Rate 7.0% Actual Flow Rate7439.85859 772,000 acfm

Expected Equipment Life 20 yrs Standardized Flow Rate 702,786 scfm @ 68o F

Dry Std Flow Rate 650,745 dscfm @ 68o F

CONTROL EQUIPMENT COSTS

Capital Costs

Direct Capital Costs (1)

Purchased Equipment (A) 5,835,625

Purchased Equipment Total (B) 22% of control device cost (A) 7,090,285

Installation - Standard Costs 85% of purchased equip cost (B) 6,026,742

Installation - Site Specific Costs 6,200,000

Installation Total 6,026,742

Total Direct Capital Cost, DC 13,117,027

Total Indirect Capital Costs, IC 15% of purchased equip cost (B) 1,063,543

Total Capital Investment (TCI) = DC + IC 28,888,911

Operating Costs

Total Annual Direct Operating Costs Labor, supervision, materials, replacement parts, utilities, etc. 1,113,462

Total Annual Indirect Operating Costs Sum indirect oper costs + capital recovery cost 3,346,795

Total Annual Cost (Annualized Capital Cost + Operating Cost) 4,460,257

Actual

Emission Control Cost Calculation Emisssions

Max Emis Annual Cont Eff Cont Emis Reduction Cont Cost

Pollutant Lb/Hr T/Yr % T/yr T/yr $/Ton Rem

Nitrous Oxides (NOx) 558.0 2,497.7 0% 2497.7 - NA

Sulfur Dioxide (SO2) 30.0 202.2 60% 80.9 121.3 36,762

Notes & Assumptions

1 Original estimate from STS Consultants. Use 0.6 Power law factor to adjust price to stack flow rate from bid basis of 500,000 acfm.

2 Liquid/Gas ratio = 38 L/G = Gal/1,000 acf.

3 Water Makeup Rate/Wastewater Discharge = 2.0% of circulating water rate.

4 Evaporation rate calculated from steam table in Basic Principles and Calculations in Chemical Engineering Third Edition.

5 CUECost Workbook Version 1.0, USEPA Document Page 2.

E:\BART\HTC\HTC Control Costs.xls

EU020 Wet Scrubber 9/1/2006 Page 13 of 42
Cleveland Cliffs Incorporated: Hibbing Taconite

BART Report - Appendix A Emission Control Cost Analysis

Table 6: SOx Control - Wet Scrubber

CAPITAL COSTS

Direct Capital Costs

Purchased Equipment (A) (1)

Purchased Equipment Costs (A) - Absorber + packing + auxiliary equipment, EC 5,835,625

Instrumentation 10% of control device cost (A) 583,563

MN Sales Taxes 7% of control device cost (A) 379,316

Freight 5% of control device cost (A) 291,781

Purchased Equipment Total (B) 22% 7,090,285

Installation

Foundations & supports 12% of purchased equip cost (B) 850,834

Handling & erection 40% of purchased equip cost (B) 2,836,114

Electrical 1% of purchased equip cost (B) 70,903

Piping 30% of purchased equip cost (B) 2,127,085

Insulation 1% of purchased equip cost (B) 70,903

Painting 1% of purchased equip cost (B) 70,903

Installation Subtotal Standard Expenses 85% 6,026,742

Total Direct Capital Cost, DC 13,117,027

Indirect Capital Costs

Engineering, supervision 5% of purchased equip cost (B) 354,514

Construction & field expenses 0% of purchased equip cost (B) 0

Contractor fees 5% of purchased equip cost (B) 354,514

Start-up 1% of purchased equip cost (B) 70,903

Performance test 1% of purchased equip cost (B) 70,903

Model Studies NA of purchased equip cost (B) NA

Contingencies 3% of purchased equip cost (B) 212,709

Total Indirect Capital Costs, IC 15% of purchased equip cost (B) 1,063,543

Total Capital Investment (TCI) = DC + IC 14,180,569

Retrofit multiplier

5

60% of TCI 8,508,342

Sitework and foundations Site Specific 1,400,000

Structural steel Site Specific 4,800,000

Site Specific - Other Site Specific 0

Total Site Specific Costs 6,200,000

Total Capital Investment (TCI) Retrofit Installed 28,888,911

OPERATING COSTS

Direct Annual Operating Costs, DC

Operating Labor

Operator 37.00 $/Hr, 0.5 hr/8 hr shift, Annual Operating Hours 24,150

Supervisor 15% 15% of Operator Costs 3,623

Maintenance

Maintenance Labor 40.00 $/Hr, 0.5 hr/8 hr shift, Annual Operating Hours 30,000

Maintenance Materials 100% of maintenance labor costs 30,000

Utilities, Supplies, Replacements & Waste Management

Electricity 0.04 $/kwh, 1,588 kW-hr, Annual Operating Hours, 93% utilization 484,289

Water 0.28 $/kgal, 724 gpm, Annual Operating Hours, 93% utilization 89,522

WW Treat Neutralization 1.69 $/kgal, 587 gpm, Annual Operating Hours, 93% utilization 442,176

Lime 90.33 $/ton, 29 lb/hr, Annual Operating Hours, 93% utilization 9,703

Total Annual Direct Operating Costs 1,113,462

Indirect Operating Costs

Overhead 60% of total labor and material costs 52,664

Administration (2% total capital costs) 2% of total capital costs (TCI) 283,611

Property tax (1% total capital costs) 1% of total capital costs (TCI) 141,806

Insurance (1% total capital costs) 1% of total capital costs (TCI) 141,806

Capital Recovery 0.0944 for a 20- year equipment life and a 7% interest rate 2,726,909

Total Annual Indirect Operating Costs Sum indirect oper costs + capital recovery cost 3,346,795

Total Annual Cost (Annualized Capital Cost + Operating Cost) 4,460,257

See Summary page for notes and assumptions

E:\BART\HTC\HTC Control Costs.xls

EU020 Wet Scrubber 9/1/2006 Page 14 of 42
Cleveland Cliffs Incorporated: Hibbing Taconite

BART Report - Appendix A Emission Control Cost Analysis

Table 6: SOx Control - Wet Scrubber

Capital Recovery Factors

Primary Installation

Interest Rate 7.00%

Equipment Life 20 years

CRF 0.0944

Replacement Catalyst:

Equipment Life 20 years

CRF 0.0000

Rep part cost per unit 0 $/ft

3

Amount Required 0 ft

3

Packing Cost 0 Cost adjusted for freight & sales tax

Installation Labor 0 Assume Labor = 15% of catalyst cost (basis labor for baghouse replacement)

Total Installed Cost 0 Zero out if no replacement parts needed

Annualized Cost 0

Replacement Parts & Equipment:

Equipment Life 3

CRF 0.3811

Rep part cost per unit 0.00 $ each

Amount Required 0 Number

Total Rep Parts Cost 0 Cost adjusted for freight & sales tax

Installation Labor 0 10 min per bag (13 hr total) Labor at $29.65/hr OAQPS list replacement times from 5 - 20 min per bag.

Total Installed Cost 0 Zero out if no replacement parts needed

Annualized Cost 0

Electrical Use

Flow acfm  P in H2O Efficiency Hp kW

Blower, Scrubber 772,000 8.55 0.7 - 1,103.2 EPA Cost Cont Manual 6th ed Section 5.2 Chapter 1 Eq 1.48

Flow Liquid SPGR  P ft H2O Efficiency Hp kW

Circ Pump 29,336 gpm 1 60 0.7 - 472.7 EPA Cost Cont Manual 6th ed Section 5.2 Chapter 1 Eq 1.49

H2O WW Disch 724 gpm 1 60 0.7 - 11.7 EPA Cost Cont Manual 6th ed Section 5.2 Chapter 1 Eq 1.49

Other

Total 1587.6

Reagent Use & Other Operating Costs

Caustic Use 30.00 lb/hr SO2 2.50 lb NaOH/lb SO2 75.00 lb/hr Caustic

Lime Use 30.00 lb/hr SO2 0.96 lb Lime/lb SO2 28.88 lb/hr lime, lime addition at 1.1 times the stoichiometric ratio

Liquid/Gas ratio 38.0 * L/G = Gal/1,000 acf

Circulating Water Rate

2

29,336 gpm

Water Makeup Rate/WW Disch

3

= 2.0% of circulating water rate + evap. loss = 724 gpm

Evaporation Loss

4

= 137.66 gpm

Operating Cost Calculations Annual hours of operation: 8,000

Utilization Rate: 93%

Unit Unit of Use Unit of Annual Annual Comments

Item Cost $ Measure Rate Measure Use* Cost

Operating Labor

Op Labor 48.30 $/Hr 0.5 hr/8 hr shift 500 24,150 $/Hr, 0.5 hr/8 hr shift, Annual Operating Hours

Supervisor 15% of Op. NA 3,623 15% of Operator Costs

Maintenance

Maint Labor 60.00 $/Hr 0.5 hr/8 hr shift 500 30,000 $/Hr, 0.5 hr/8 hr shift, Annual Operating Hours

Maint Mtls 100 % of Maintenance Labor NA 30,000 100% of Maintenance Labor

Utilities, Supplies, Replacements & Waste Management

Electricity 0.041 $/kwh 1587.6 kW-hr 11,811,923 484,289 $/kwh, 1,588 kW-hr, Annual Operating Hours, 93% utilization

Water 0.28 $/kgal 724.4 gpm 323,362 89,522 $/kgal, 724 gpm, Annual Operating Hours, 93% utilization

WW Treat Neutralization 1.69 $/kgal 586.7 gpm 261,912 442,176 $/kgal, 587 gpm, Annual Operating Hours, 93% utilization

Lime 90.3 $/ton 28.9 lb/hr 107 9,703 $/ton, 29 lb/hr, Annual Operating Hours, 93% utilization

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

See Summary page for notes and assumptions

E:\BART\HTC\HTC Control Costs.xls

EU020 Wet Scrubber 9/1/2006 Page 15 of 42
Cleveland Cliffs Incorporated: Hibbing Taconite

BART Report - Appendix A Emission Control Cost Analysis

Table 7: SOx Control - Wet Scrubber

Operating Unit: Pellet Indurating Furnace Line No 1

Emission Unit Number EU 020 Stack/Vent Number SV021M-SV024M

Standardized Flow Rate 654,869 scfm @ 32o F

Expected Utilization Rate 93% Temperature 120 Deg F

Expected Annual Hours of Operation 8,000 Hours Moisture Content 7.4%

Annual Interest Rate 7.0% Actual Flow Rate7439.85859 772,000 acfm

Expected Equipment Life 20 yrs Standardized Flow Rate 702,786 scfm @ 68o F

Dry Std Flow Rate 650,745 dscfm @ 68o F

CONTROL EQUIPMENT COSTS

Capital Costs

Direct Capital Costs (1)

Purchased Equipment (A) 5,835,625

Purchased Equipment Total (B) 22% of control device cost (A) 7,090,285

Installation - Standard Costs 85% of purchased equip cost (B) 6,026,742

Installation - Site Specific Costs 6,200,000

Installation Total 6,026,742

Total Direct Capital Cost, DC 13,117,027

Total Indirect Capital Costs, IC 15% of purchased equip cost (B) 1,063,543

Total Capital Investment (TCI) = DC + IC 28,888,911

Operating Costs

Total Annual Direct Operating Costs Labor, supervision, materials, replacement parts, utilities, etc. 1,113,462

Total Annual Indirect Operating Costs Sum indirect oper costs + capital recovery cost 3,346,795

Total Annual Cost (Annualized Capital Cost + Operating Cost) 4,460,257

Actual

Emission Control Cost Calculation Emisssions

Max Emis Annual Cont Eff Cont Emis Reduction Cont Cost

Pollutant Lb/Hr T/Yr % T/yr T/yr $/Ton Rem

Nitrous Oxides (NOx) 558.0 2,497.7 0% 2497.7 - NA

Sulfur Dioxide (SO2) 30.0 202.2 60% 80.9 121.3 36,762

Notes & Assumptions

1 Original estimate from STS Consultants. Use 0.6 Power law factor to adjust price to stack flow rate from bid basis of 500,000 acfm.

2 Liquid/Gas ratio = 38 L/G = Gal/1,000 acf.

3 Water Makeup Rate/Wastewater Discharge = 2.0% of circulating water rate.

4 Evaporation rate calculated from steam table in Basic Principles and Calculations in Chemical Engineering Third Edition.

5 CUECost Workbook Version 1.0, USEPA Document Page 2.

E:\BART\HTC\HTC Control Costs.xls

EU021 Wet Scrubber 9/1/2006 Page 16 of 42
Cleveland Cliffs Incorporated: Hibbing Taconite

BART Report - Appendix A Emission Control Cost Analysis

Table 7: SOx Control - Wet Scrubber

CAPITAL COSTS

Direct Capital Costs

Purchased Equipment (A) (1)

Purchased Equipment Costs (A) - Absorber + packing + auxiliary equipment, EC 5,835,625

Instrumentation 10% of control device cost (A) 583,563

MN Sales Taxes 7% of control device cost (A) 379,316

Freight 5% of control device cost (A) 291,781

Purchased Equipment Total (B) 22% 7,090,285

Installation

Foundations & supports 12% of purchased equip cost (B) 850,834

Handling & erection 40% of purchased equip cost (B) 2,836,114

Electrical 1% of purchased equip cost (B) 70,903

Piping 30% of purchased equip cost (B) 2,127,085

Insulation 1% of purchased equip cost (B) 70,903

Painting 1% of purchased equip cost (B) 70,903

Installation Subtotal Standard Expenses 85% 6,026,742

Total Direct Capital Cost, DC 13,117,027

Indirect Capital Costs

Engineering, supervision 5% of purchased equip cost (B) 354,514

Construction & field expenses 0% of purchased equip cost (B) 0

Contractor fees 5% of purchased equip cost (B) 354,514

Start-up 1% of purchased equip cost (B) 70,903

Performance test 1% of purchased equip cost (B) 70,903

Model Studies NA of purchased equip cost (B) NA

Contingencies 3% of purchased equip cost (B) 212,709

Total Indirect Capital Costs, IC 15% of purchased equip cost (B) 1,063,543

Total Capital Investment (TCI) = DC + IC 14,180,569

Retrofit multiplier

5

60% of TCI 8,508,342

Sitework and foundations Site Specific 1,400,000

Structural steel Site Specific 4,800,000

Site Specific - Other Site Specific 0

Total Site Specific Costs 6,200,000

Total Capital Investment (TCI) Retrofit Installed 28,888,911

OPERATING COSTS

Direct Annual Operating Costs, DC

Operating Labor

Operator 37.00 $/Hr, 0.5 hr/8 hr shift, Annual Operating Hours 24,150

Supervisor 15% 15% of Operator Costs 3,623

Maintenance

Maintenance Labor 40.00 $/Hr, 0.5 hr/8 hr shift, Annual Operating Hours 30,000

Maintenance Materials 100% of maintenance labor costs 30,000

Utilities, Supplies, Replacements & Waste Management

Electricity 0.04 $/kwh, 1,588 kW-hr, Annual Operating Hours, 93% utilization 484,289

Water 0.28 $/kgal, 724 gpm, Annual Operating Hours, 93% utilization 89,522

WW Treat Neutralization 1.69 $/kgal, 587 gpm, Annual Operating Hours, 93% utilization 442,176

Lime 90.33 $/ton, 29 lb/hr, Annual Operating Hours, 93% utilization 9,703

Total Annual Direct Operating Costs 1,113,462

Indirect Operating Costs

Overhead 60% of total labor and material costs 52,664

Administration (2% total capital costs) 2% of total capital costs (TCI) 283,611

Property tax (1% total capital costs) 1% of total capital costs (TCI) 141,806

Insurance (1% total capital costs) 1% of total capital costs (TCI) 141,806

Capital Recovery 0.0944 for a 20- year equipment life and a 7% interest rate 2,726,909

Total Annual Indirect Operating Costs Sum indirect oper costs + capital recovery cost 3,346,795

Total Annual Cost (Annualized Capital Cost + Operating Cost) 4,460,257

See Summary page for notes and assumptions

E:\BART\HTC\HTC Control Costs.xls

EU021 Wet Scrubber 9/1/2006 Page 17 of 42
Cleveland Cliffs Incorporated: Hibbing Taconite

BART Report - Appendix A Emission Control Cost Analysis

Table 7: SOx Control - Wet Scrubber

Capital Recovery Factors

Primary Installation

Interest Rate 7.00%

Equipment Life 20 years

CRF 0.0944

Replacement Catalyst:

Equipment Life 20 years

CRF 0.0000

Rep part cost per unit 0 $/ft

3

Amount Required 0 ft

3

Packing Cost 0 Cost adjusted for freight & sales tax

Installation Labor 0 Assume Labor = 15% of catalyst cost (basis labor for baghouse replacement)

Total Installed Cost 0 Zero out if no replacement parts needed

Annualized Cost 0

Replacement Parts & Equipment:

Equipment Life 3

CRF 0.3811

Rep part cost per unit 0.00 $ each

Amount Required 0 Number

Total Rep Parts Cost 0 Cost adjusted for freight & sales tax

Installation Labor 0 10 min per bag (13 hr total) Labor at $29.65/hr OAQPS list replacement times from 5 - 20 min per bag.

Total Installed Cost 0 Zero out if no replacement parts needed

Annualized Cost 0

Electrical Use

Flow acfm  P in H2O Efficiency Hp kW

Blower, Scrubber 772,000 8.55 0.7 - 1,103.2 EPA Cost Cont Manual 6th ed Section 5.2 Chapter 1 Eq 1.48

Flow Liquid SPGR  P ft H2O Efficiency Hp kW

Circ Pump 29,336 gpm 1 60 0.7 - 472.7 EPA Cost Cont Manual 6th ed Section 5.2 Chapter 1 Eq 1.49

H2O WW Disch 724 gpm 1 60 0.7 - 11.7 EPA Cost Cont Manual 6th ed Section 5.2 Chapter 1 Eq 1.49

Other

Total 1587.6

Reagent Use & Other Operating Costs

Caustic Use 30.00 lb/hr SO2 2.50 lb NaOH/lb SO2 75.00 lb/hr Caustic

Lime Use 30.00 lb/hr SO2 0.96 lb Lime/lb SO2 28.88 lb/hr lime, lime addition at 1.1 times the stoichiometric ratio

Liquid/Gas ratio 38.0 * L/G = Gal/1,000 acf

Circulating Water Rate

2

29,336 gpm

Water Makeup Rate/WW Disch

3

= 2.0% of circulating water rate + evap. loss = 724 gpm

Evaporation Loss

4

= 137.66 gpm

Operating Cost Calculations Annual hours of operation: 8,000

Utilization Rate: 93%

Unit Unit of Use Unit of Annual Annual Comments

Item Cost $ Measure Rate Measure Use* Cost

Operating Labor

Op Labor 48.30 $/Hr 0.5 hr/8 hr shift 500 24,150 $/Hr, 0.5 hr/8 hr shift, Annual Operating Hours

Supervisor 15% of Op. NA 3,623 15% of Operator Costs

Maintenance

Maint Labor 60.00 $/Hr 0.5 hr/8 hr shift 500 30,000 $/Hr, 0.5 hr/8 hr shift, Annual Operating Hours

Maint Mtls 100 % of Maintenance Labor NA 30,000 100% of Maintenance Labor

Utilities, Supplies, Replacements & Waste Management

Electricity 0.041 $/kwh 1587.6 kW-hr 11,811,923 484,289 $/kwh, 1,588 kW-hr, Annual Operating Hours, 93% utilization

Water 0.28 $/kgal 724.4 gpm 323,362 89,522 $/kgal, 724 gpm, Annual Operating Hours, 93% utilization

WW Treat Neutralization 1.69 $/kgal 586.7 gpm 261,912 442,176 $/kgal, 587 gpm, Annual Operating Hours, 93% utilization

Lime 90.3 $/ton 28.9 lb/hr 107 9,703 $/ton, 29 lb/hr, Annual Operating Hours, 93% utilization

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

See Summary page for notes and assumptions

E:\BART\HTC\HTC Control Costs.xls

EU021 Wet Scrubber 9/1/2006 Page 18 of 42
Cleveland Cliffs Incorporated: Hibbing Taconite

BART Report - Appendix A Emission Control Cost Analysis

Table 8: SOx Control - Wet Scrubber

Operating Unit: Pellet Indurating Furnace Line No 1

Emission Unit Number EU 020 Stack/Vent Number SV021M-SV024M

Standardized Flow Rate 654,869 scfm @ 32o F

Expected Utilization Rate 93% Temperature 120 Deg F

Expected Annual Hours of Operation 8,000 Hours Moisture Content 7.4%

Annual Interest Rate 7.0% Actual Flow Rate7439.85859 772,000 acfm

Expected Equipment Life 20 yrs Standardized Flow Rate 702,786 scfm @ 68o F

Dry Std Flow Rate 650,745 dscfm @ 68o F

CONTROL EQUIPMENT COSTS

Capital Costs

Direct Capital Costs (1)

Purchased Equipment (A) 5,835,625

Purchased Equipment Total (B) 22% of control device cost (A) 7,090,285

Installation - Standard Costs 85% of purchased equip cost (B) 6,026,742

Installation - Site Specific Costs 6,200,000

Installation Total 6,026,742

Total Direct Capital Cost, DC 13,117,027

Total Indirect Capital Costs, IC 15% of purchased equip cost (B) 1,063,543

Total Capital Investment (TCI) = DC + IC 28,888,911

Operating Costs

Total Annual Direct Operating Costs Labor, supervision, materials, replacement parts, utilities, etc. 1,113,462

Total Annual Indirect Operating Costs Sum indirect oper costs + capital recovery cost 3,346,795

Total Annual Cost (Annualized Capital Cost + Operating Cost) 4,460,257

Actual

Emission Control Cost Calculation Emisssions

Max Emis Annual Cont Eff Cont Emis Reduction Cont Cost

Pollutant Lb/Hr T/Yr % T/yr T/yr $/Ton Rem

Nitrous Oxides (NOx) 558.0 2,497.7 0% 2497.7 - NA

Sulfur Dioxide (SO2) 30.0 202.2 60% 80.9 121.3 36,762

Notes & Assumptions

1 Original estimate from STS Consultants. Use 0.6 Power law factor to adjust price to stack flow rate from bid basis of 500,000 acfm.

2 Liquid/Gas ratio = 38 L/G = Gal/1,000 acf.

3 Water Makeup Rate/Wastewater Discharge = 2.0% of circulating water rate.

4 Evaporation rate calculated from steam table in Basic Principles and Calculations in Chemical Engineering Third Edition.

5 CUECost Workbook Version 1.0, USEPA Document Page 2.

E:\BART\HTC\HTC Control Costs.xls

EU022 Wet Scrubber 9/1/2006 Page 19 of 42
Cleveland Cliffs Incorporated: Hibbing Taconite

BART Report - Appendix A Emission Control Cost Analysis

Table 8: SOx Control - Wet Scrubber

CAPITAL COSTS

Direct Capital Costs

Purchased Equipment (A) (1)

Purchased Equipment Costs (A) - Absorber + packing + auxiliary equipment, EC 5,835,625

Instrumentation 10% of control device cost (A) 583,563

MN Sales Taxes 7% of control device cost (A) 379,316

Freight 5% of control device cost (A) 291,781

Purchased Equipment Total (B) 22% 7,090,285

Installation

Foundations & supports 12% of purchased equip cost (B) 850,834

Handling & erection 40% of purchased equip cost (B) 2,836,114

Electrical 1% of purchased equip cost (B) 70,903

Piping 30% of purchased equip cost (B) 2,127,085

Insulation 1% of purchased equip cost (B) 70,903

Painting 1% of purchased equip cost (B) 70,903

Installation Subtotal Standard Expenses 85% 6,026,742

Total Direct Capital Cost, DC 13,117,027

Indirect Capital Costs

Engineering, supervision 5% of purchased equip cost (B) 354,514

Construction & field expenses 0% of purchased equip cost (B) 0

Contractor fees 5% of purchased equip cost (B) 354,514

Start-up 1% of purchased equip cost (B) 70,903

Performance test 1% of purchased equip cost (B) 70,903

Model Studies NA of purchased equip cost (B) NA

Contingencies 3% of purchased equip cost (B) 212,709

Total Indirect Capital Costs, IC 15% of purchased equip cost (B) 1,063,543

Total Capital Investment (TCI) = DC + IC 14,180,569

Retrofit multiplier

5

60% of TCI 8,508,342

Sitework and foundations Site Specific 1,400,000

Structural steel Site Specific 4,800,000

Site Specific - Other Site Specific 0

Total Site Specific Costs 6,200,000

Total Capital Investment (TCI) Retrofit Installed 28,888,911

OPERATING COSTS

Direct Annual Operating Costs, DC

Operating Labor

Operator 37.00 $/Hr, 0.5 hr/8 hr shift, Annual Operating Hours 24,150

Supervisor 15% 15% of Operator Costs 3,623

Maintenance

Maintenance Labor 40.00 $/Hr, 0.5 hr/8 hr shift, Annual Operating Hours 30,000

Maintenance Materials 100% of maintenance labor costs 30,000

Utilities, Supplies, Replacements & Waste Management

Electricity 0.04 $/kwh, 1,588 kW-hr, Annual Operating Hours, 93% utilization 484,289

Water 0.28 $/kgal, 724 gpm, Annual Operating Hours, 93% utilization 89,522

WW Treat Neutralization 1.69 $/kgal, 587 gpm, Annual Operating Hours, 93% utilization 442,176

Lime 90.33 $/ton, 29 lb/hr, Annual Operating Hours, 93% utilization 9,703

Total Annual Direct Operating Costs 1,113,462

Indirect Operating Costs

Overhead 60% of total labor and material costs 52,664

Administration (2% total capital costs) 2% of total capital costs (TCI) 283,611

Property tax (1% total capital costs) 1% of total capital costs (TCI) 141,806

Insurance (1% total capital costs) 1% of total capital costs (TCI) 141,806

Capital Recovery 0.0944 for a 20- year equipment life and a 7% interest rate 2,726,909

Total Annual Indirect Operating Costs Sum indirect oper costs + capital recovery cost 3,346,795

Total Annual Cost (Annualized Capital Cost + Operating Cost) 4,460,257

See Summary page for notes and assumptions

E:\BART\HTC\HTC Control Costs.xls

EU022 Wet Scrubber 9/1/2006 Page 20 of 42
Cleveland Cliffs Incorporated: Hibbing Taconite

BART Report - Appendix A Emission Control Cost Analysis

Table 8: SOx Control - Wet Scrubber

Capital Recovery Factors

Primary Installation

Interest Rate 7.00%

Equipment Life 20 years

CRF 0.0944

Replacement Catalyst:

Equipment Life 20 years

CRF 0.0000

Rep part cost per unit 0 $/ft

3

Amount Required 0 ft

3

Packing Cost 0 Cost adjusted for freight & sales tax

Installation Labor 0 Assume Labor = 15% of catalyst cost (basis labor for baghouse replacement)

Total Installed Cost 0 Zero out if no replacement parts needed

Annualized Cost 0

Replacement Parts & Equipment:

Equipment Life 3

CRF 0.3811

Rep part cost per unit 0.00 $ each

Amount Required 0 Number

Total Rep Parts Cost 0 Cost adjusted for freight & sales tax

Installation Labor 0 10 min per bag (13 hr total) Labor at $29.65/hr OAQPS list replacement times from 5 - 20 min per bag.

Total Installed Cost 0 Zero out if no replacement parts needed

Annualized Cost 0

Electrical Use

Flow acfm  P in H2O Efficiency Hp kW

Blower, Scrubber 772,000 8.55 0.7 - 1,103.2 EPA Cost Cont Manual 6th ed Section 5.2 Chapter 1 Eq 1.48

Flow Liquid SPGR  P ft H2O Efficiency Hp kW

Circ Pump 29,336 gpm 1 60 0.7 - 472.7 EPA Cost Cont Manual 6th ed Section 5.2 Chapter 1 Eq 1.49

H2O WW Disch 724 gpm 1 60 0.7 - 11.7 EPA Cost Cont Manual 6th ed Section 5.2 Chapter 1 Eq 1.49

Other

Total 1587.6

Reagent Use & Other Operating Costs

Caustic Use 30.00 lb/hr SO2 2.50 lb NaOH/lb SO2 75.00 lb/hr Caustic

Lime Use 30.00 lb/hr SO2 0.96 lb Lime/lb SO2 28.88 lb/hr lime, lime addition at 1.1 times the stoichiometric ratio

Liquid/Gas ratio 38.0 * L/G = Gal/1,000 acf

Circulating Water Rate

2

29,336 gpm

Water Makeup Rate/WW Disch

3

= 2.0% of circulating water rate + evap. loss = 724 gpm

Evaporation Loss

4

= 137.66 gpm

Operating Cost Calculations Annual hours of operation: 8,000

Utilization Rate: 93%

Unit Unit of Use Unit of Annual Annual Comments

Item Cost $ Measure Rate Measure Use* Cost

Operating Labor

Op Labor 48.30 $/Hr 0.5 hr/8 hr shift 500 24,150 $/Hr, 0.5 hr/8 hr shift, Annual Operating Hours

Supervisor 15% of Op. NA 3,623 15% of Operator Costs

Maintenance

Maint Labor 60.00 $/Hr 0.5 hr/8 hr shift 500 30,000 $/Hr, 0.5 hr/8 hr shift, Annual Operating Hours

Maint Mtls 100 % of Maintenance Labor NA 30,000 100% of Maintenance Labor

Utilities, Supplies, Replacements & Waste Management

Electricity 0.041 $/kwh 1587.6 kW-hr 11,811,923 484,289 $/kwh, 1,588 kW-hr, Annual Operating Hours, 93% utilization

Water 0.28 $/kgal 724.4 gpm 323,362 89,522 $/kgal, 724 gpm, Annual Operating Hours, 93% utilization

WW Treat Neutralization 1.69 $/kgal 586.7 gpm 261,912 442,176 $/kgal, 587 gpm, Annual Operating Hours, 93% utilization

Lime 90.3 $/ton 28.9 lb/hr 107 9,703 $/ton, 29 lb/hr, Annual Operating Hours, 93% utilization

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

See Summary page for notes and assumptions

E:\BART\HTC\HTC Control Costs.xls

EU022 Wet Scrubber 9/1/2006 Page 21 of 42
Cleveland Cliffs Incorporated: Hibbing Taconite

BART Report - Appendix A Emission Control Cost Analysis

Table 9: NOx Control - Selective Catalytic Reduction with Reheat

Operating Unit: Pellet Indurating Furnace Line No 1

Emission Unit Number EU 020 Stack/Vent Number SV021M-SV024M

Desgin Capacity 360 MMBtu/hr Standardized Flow Rate 654,869 scfm @ 32o F

Expected Utiliztion Rate 93% Temperature 120 Deg F

Expected Annual Hours of Operation 8,000 Hours Moisture Content 7.4%

Annual Interest Rate 7.0% Actual Flow Rate 772,000 acfm

Expected Equipment Life 20 yrs Standardized Flow Rate 702,786 scfm @ 68o F

Dry Std Flow Rate 650,745 dscfm @ 68o F

CONTROL EQUIPMENT COSTS

Capital Costs

Direct Capital Costs EPRI Correlation

Purchased Equipment (A) 28,544,643

Purchased Equipment Total (B) SCR Only 2,643,899

Installation - Standard Costs 15% of purchased equip cost (B) SCR Only 4,678,281

Installation - Site Specific Costs 6,200,000

Installation Total 33,367,982

Total Direct Capital Cost, DC 35,866,823

Total Indirect Capital Costs, IC 9% of purchased equip cost (B) 9,413,148

Total Capital Investment (TCI) = DC + IC SCR + Reheat 80,957,276

Operating Costs

Total Annual Direct Operating Costs Labor, supervision, materials, replacement parts, utilities, etc. SCR + Reheat 31,608,726

Total Annual Indirect Operating Costs Sum indirect oper costs + capital recovery cost SCR + Reheat 11,038,886

Total Annual Cost (Annualized Capital Cost + Operating Cost) SCR + Reheat 42,647,613

Emission Control Cost Calculation

Baseline Predicted Limit Cont. Emis. Cont Emis Reduction Cont Cost

Pollutant Emis. T/yr lb/hr lb/MMBtu T/yr T/yr $/Ton Rem

Nitrous Oxides (NOx) 2,497.7 111.6 0.31 415.2 2,082.6 20,478

Notes & Assumptions

1 Estimated Equipment Cost per EPA Air Pollution Control Cost Manual 6th Ed 2002, Section 4.2 Chapter 2.

2 For Calculation purposes, duty reflects increased flow rate, not actual duty.

3 Calculations per EPA Air Pollution Control Cost Manual 6th Ed 2002, Section 4.2 Chapter 2

4 Capital Cost per EPA Air Pollution Control Cost Manual 6th Ed 2002, Section 4.2 Chapter 2 Eq 2.36 -2.43

5 Reagent Use per EPA Air Pollution Control Cost Manual 6th Ed 2002, Section 4.2 Chapter 2 Eq 2.32 - 2.35

6 SCR Catalyst Volume per EPA Air Pollution Control Cost Manual 6th Ed 2002, Section 4.2 Chapter 2 Eq 2.18 - 2.24

7 SCR Reactor Size per EPA Air Pollution Control Cost Manual 6th Ed 2002, Section 4.2 Chapter 2 Eq 2.25 - 2.31

8 SCR Catalyst Replacement per EPA Air Pollution Control Cost Manual 6th Ed 2002, Section 4.2 Chapter 2 Eq 2.50 - 2.53

9 SCR Electrical Demand per EPA Air Pollution Control Cost Manual 6th Ed 2002, Section 4.2 Chapter 2 Eq 2.48

10 SCR Maintenance Costs EPA Air Pollution Control Cost Manual 6th Ed 2002, Section 4.2 Chapter 2 Eq 2.46

11 Control Efficiency = 80% reduction

12 Site specific electricity costs

13 Catalyst replacement every 3 years. This requires an additional 2 week outage per 3 year outage cycle, annualized to 4.7 days.

E:\BART\HTC\HTC Control Costs.xls

EU020 SCR EU020 SCR 22 of 42
Cleveland Cliffs Incorporated: Hibbing Taconite

BART Report - Appendix A Emission Control Cost Analysis

Table 9: NOx Control - Selective Catalytic Reduction with Reheat

CAPITAL COSTS

Direct Capital Costs

Purchased Equipment (A) (1)

Purchased Equipment Costs (A) - Absorber + packing + auxillary equipment, EC 26,802,482

Instrumentation 10% of control device cost (A) NA

MN Sales Taxes 6.5% of control device cost (A) 1,742,161

Freight 5% of control device cost (A) NA

Purchased Equipment Total (A) 28,544,643

Indirect Installation

General Facilities 0% of purchased equip cost (A) 0

Engineering & Home Office 0% of purchased equip cost (A) 0

Process Contingency 0% of purchased equip cost (A) 0

Site Specific-Other 9% Replacement Power, two weeks 2,643,899

Total Indirect Installation Costs (B) 9% of purchased equip cost (A) 2,643,899

Project Contingeny ( C) 15% of (A + B) 4,678,281

Total Plant Cost D A + B + C 35,866,823

Allowance for Funds During Construction (E) Additional 10 week outage for installation 8,232,000

Royalty Allowance (F) 0 for SNCR 0

Pre Production Costs (G) 2% of (D+E)) 881,976

Inventory Capital (I) Reagent Vol * $/gal 299,172

Total Capital Investment (TCI) = DC + IC D + E + F + G + I 45,279,971

Retrofit multiplier

3

60% of TCI 27,167,982

Sitework and foundations Site Specific 1,400,000

Structural steel Site Specific 4,800,000

Site Specific - Other Site Specific NA

Total Site Specific Costs 6,200,000

Total Capital Investment (TCI) Retrofit Installed 78,647,953

Adjusted TCI for Replacement Parts (Catalyst, Filter Bags, etc) for Capital Recovery Cost NA

NA for capital recovery cost because costs are included as annual operating costs.

OPERATING COSTS

Direct Annual Operating Costs, DC

Operating Labor

Operator 48.30 $/Hr, 2.0 hr/8 hr shift, 8000 hr/yr 96,600

Supervisor 15% 15% of Operator Costs 14,490

Maintenance

Maintenance Total 1.50 % of Total Capital Investment 1,179,719

Maintenance Materials NA % of Maintenance Labor -

Utilities, Supplies, Replacements & Waste Management

Electricity 0.04 $/kwh, 9,489 kW-hr, 8000 hr/yr, 93% utilization 2,894,422

NA NA -

NA NA -

NA NA -

NA NA -

NA NA -

NA NA -

NA NA -

NA NA -

NA NA -

Cat. Replacement [14] 64.71 Catalyst Replacement 4,956,497

NA NA -

Ammonia 0.12 $/lb, 8,816 lb/hr, 8000 hr/yr, 93% utilization 7,910,014

NA NA -

NA NA -

NA NA -

Total Annual Direct Operating Costs 17,051,743

Indirect Operating Costs

Overhead 60% of total labor and material costs 106,138

Administration (2% total capital costs) 2% of total capital costs (TCI) 1,572,959

Property tax (1% total capital costs) 1% of total capital costs (TCI) 786,480

Insurance (1% total capital costs) 1% of total capital costs (TCI) 786,480

Capital Recovery 0.0944 for a 20- year equipment life and a 7% interest rate 7,423,810

Total Annual Indirect Operating Costs Sum indirect oper costs + capital recovery cost 10,675,866

Total Annual Cost (Annualized Capital Cost + Operating Cost) 27,727,609

E:\BART\HTC\HTC Control Costs.xls

EU020 SCR EU020 SCR 23 of 42
Cleveland Cliffs Incorporated: Hibbing Taconite

BART Report - Appendix A Emission Control Cost Analysis

Table 9: NOx Control - Selective Catalytic Reduction with Reheat

Capital Recovery Factors

Primary Installation

Interest Rate 7.00%

Equipment Life 20 years

CRF 0.0944

Equivalent Duty 4,244 Plant Cap kW A 435,325

Est power platn eff 35% Unc Nox lb/mmBtuB 1.55 D=75*(300,000)*((B/1.5)^0.05*(C/100)^0.04)A)^0.35

Watt per Btu/hr 0.29307 Nox Red. Eff. C 80% E=D*A*0.0066

Equivalent power plant kW 435,325 Capital Cost $/kW D $61.57 $26,802,481.70 Total SCR Equipment

Uncontrolled Nox t/y 2,497.7 Fixed O&M E $176,896.38

Annual Operating Hrs 8000 Variable O&M F $779,288.84

Uncontrolled Nox lb/mmBtu 1.550 Ann Cap Factor G 0.82

Heat Input mmBtu/hHr 6,000

SCR Capital Cost

Duty 4,244 MMBtu/hr Catalyst Area 2,047 ft

2

979 f (h SCR)

Q flue gas 1,965,552 acfm Rx Area 2,355 -15 f (h NH3

)

NOx Cont Eff 80% Rx Height 48.5 ft 0 f (h New) new= -728, Retrofit = 0

NOx in 1.55 lb/MMBtu n layer 36 layers Y Bypass? Y or N

Ammonia Slip 2 ppm h layer 38.4 ft 127 f (h Bypass)

Fuel Sulfur 0.67 wt % (as %) n total 37 layers 55,148,785 f (vol catalyst)

Temperature 120 Deg F h SCR 191 ft f (h SCR)

Catalyst Volume 229,787 ft

3

New/Retrofit R N or R

Electrical Use

Duty 4,244 MMBtu/hr kW

NOx Cont Eff 80% Power 9,488.7

NOx in 1.55 lb/MMBtu

n catalyst layers 37 layers

Press drop catalyst 1 in H2O per layer

Press drop duct 3 in H2O

Total 9488.7

Reagent Use & Other Operating Costs

Ammonia Use 56.0 lb/ft

3 Density

2557 lb/hr Neat 1177.7 gal/hr

29% solution Volume 14 day inventory 395,704 gal $299,172 Inventory Cost

8816 lb/hr

Design Basis Baseline EmisB.aseline EmisM. ax Emis. (Model) Control Eff (%) Cont. Emis (lb/MMBtu)

T/yr lb/MMBtu lb/hr 80% 0.31

Nitrous Oxides (NOx) 2,497.7 1.6 558.00

Actual 108,457 dscf/MMBtu

Method 19 Factor 9,200 dscf/MMBtu

Adjusted Duty 4,244 MMBtu/hr

Operating Cost Calculations Annual hours of operation: 8,000

Utilization Rate: 93%

Unit Unit of Use Unit of Annual Annual Comments

Item Cost $ Measure Rate Measure Use* Cost

Operating Labor

Op Labor 48.30 $/Hr 2.0 hr/8 hr shift 2,000 96,600 $/Hr, 2.0 hr/8 hr shift, 8000 hr/yr

Supervisor 15% of Op. NA 14,490 15% of Operator Costs

Maintenance

Maintenance Total 1.5 % of Total Capital Investment 1,179,719 % of Total Capital Investment

Maint Mtls 0 % of Maintenance Labor NA 0 0% of Maintenance Labor

Utilities, Supplies, Replacements & Waste Management

Electricity 0.041 $/kwh 9488.7 kW-hr 70,595,665 2,894,422 $/kwh, 9,489 kW-hr, 8000 hr/yr, 93% utilization

Cat. Replacement [14] 65 $/ft3 76,596 4,956,497 Catalyst Replacement

7 Ammonia 0.12 $/lb 8816 lb/hr 65,589,231 7,910,014 $/lb, 8,816 lb/hr, 8000 hr/yr, 93% utilization

** Std Air use is 2 scfm/kacfm *annual use rate is in same units of measurement as the unit cost factor

See Summary page for notes and assumptions

E:\BART\HTC\HTC Control Costs.xls

EU020 SCR EU020 SCR 24 of 42
Cleveland Cliffs Incorporated: Hibbing Taconite

BART Report - Appendix A Emission Control Cost Analysis

Table 10: NOx Control - Selective Catalytic Reduction with Reheat

Operating Unit: Pellet Indurating Furnace Line No 1

Emission Unit Number EU 020 Stack/Vent Number SV021M-SV024M Chemical Engineering

Desgin Capacity 360 MMBtu/hr Standardized Flow Rate 654,869 scfm @ 32o F Chemical Plant Cost Index

Expected Utiliztion Rate 93% Temperature 120 Deg F 1998/1999 390

Expected Annual Hours of Operation 8,000 Hours Moisture Content 7.4% 2005 465

Annual Interest Rate 7.0% Actual Flow Rate 772,000 acfm Inflation Adj 1.19

Expected Equipment Life 20 yrs Standardized Flow Rate 702,786 scfm @ 68o F

Dry Std Flow Rate 650,745 dscfm @ 68o F

CONTROL EQUIPMENT COSTS

Capital Costs

Direct Capital Costs

Purchased Equipment (A) 737,840

Purchased Equipment Total (B) 22% of control device cost (A) 896,476

Installation - Standard Costs 30% of purchased equip cost (B) 268,943

Installation - Site Specific Costs NA

Installation Total 268,943

Total Direct Capital Cost, DC 1,165,419

Total Indirect Capital Costs, IC 31% of purchased equip cost (B) 277,908

Total Capital Investment (TCI) = DC + IC 2,309,322

Operating Costs

Total Annual Direct Operating Costs Labor, supervision, materials, replacement parts, utilities, etc. 14,556,983

Total Annual Indirect Operating Costs Sum indirect oper costs + capital recovery cost 363,020

Total Annual Cost (Annualized Capital Cost + Operating Cost) 14,920,003

Notes & Assumptions

1 Equipment cost estimate EPA Air Pollution Control Cost Manual 6th Ed 2002, Section 3.2 Chapter 2.5.1

2 Calculations per EPA Air Pollution Control Cost Manual 6th Ed 2002, Section 3.2 Chapter 2

E:\BART\HTC\HTC Control Costs.xls

EU020 Reheat EU020 Reheat 25 of 42
Cleveland Cliffs Incorporated: Hibbing Taconite

BART Report - Appendix A Emission Control Cost Analysis

Table 10: NOx Control - Selective Catalytic Reduction with Reheat

CAPITAL COSTS

Direct Capital Costs

Purchased Equipment (A) (1) 737,840

Purchased Equipment Costs (A) - Absorber + packing + auxillary equipment, EC

Instrumentation 10% of control device cost (A) 73,784

MN Sales Taxes 6.5% of control device cost (A) 47,960

Freight 5% of control device cost (A) 36,892

Purchased Equipment Total (B) 22% 896,476

Installation

Foundations & supports 8% of purchased equip cost (B) 71,718

Handling & erection 14% of purchased equip cost (B) 125,507

Electrical 4% of purchased equip cost (B) 35,859

Piping 2% of purchased equip cost (B) 17,930

Insulation 1% of purchased equip cost (B) 8,965

Painting 1% of purchased equip cost (B) 8,965

Installation Subtotal Standard Expenses 30% 268,943

Site Preparation, as required Included in SCR 0

Buildings, as required Included in SCR 0

Site Specific - Other Included in SCR 0

Total Site Specific Costs NA

Installation Total 268,943

Total Direct Capital Cost, DC 1,165,419

Indirect Capital Costs

Engineering, supervision 10% of purchased equip cost (B) 89,648

Construction & field expenses 5% of purchased equip cost (B) 44,824

Contractor fees 10% of purchased equip cost (B) 89,648

Start-up 2% of purchased equip cost (B) 17,930

Performance test 1% of purchased equip cost (B) 8,965

Model Studies of purchased equip cost (B) 0

Contingencies 3% of purchased equip cost (B) 26,894

Total Indirect Capital Costs, IC 31% of purchased equip cost (B) 277,908

Total Capital Investment (TCI) = DC + IC 1,443,327

Retrofit multiplier

3

60% of TCI 865,996

Total Capital Investment (TCI) Retrofit Installed 2,309,322

Adjusted TCI for Replacement Parts (Catalyst, Filter Bags, etc) for Capital Recovery Cost 2,309,322

OPERATING COSTS

Direct Annual Operating Costs, DC

Operating Labor

Operator 48.30 $/Hr, 0.5 hr/8 hr shift, 8000 hr/yr 24,150

Supervisor 15% 15% of Operator Costs 3,623

Maintenance

Maintenance Labor 60.00 $/Hr, 0.5 hr/8 hr shift, 8000 hr/yr 30,000

Maintenance Materials 100% of maintenance labor costs 30,000

Utilities, Supplies, Replacements & Waste Management

Electricity 0.04 $/kwh, 2,860 kW-hr, 8000 hr/yr, 93% utilization 872,494

Natural Gas 7.41 $/mscf, 4,110 scfm, 8000 hr/yr, 93% utilization 13,596,717

Total Annual Direct Operating Costs 14,556,983

Indirect Operating Costs

Overhead 60% of total labor and material costs 52,664

Administration (2% total capital costs) 2% of total capital costs (TCI) 46,186

Property tax (1% total capital costs) 1% of total capital costs (TCI) 23,093

Insurance (1% total capital costs) 1% of total capital costs (TCI) 23,093

Capital Recovery 0.0944 for a 20- year equipment life and a 7% interest rate 217,984

Total Annual Indirect Operating Costs Sum indirect oper costs + capital recovery cost 363,020

Total Annual Cost (Annualized Capital Cost + Operating Cost) 14,920,003

See Summary page for notes and assumptions

E:\BART\HTC\HTC Control Costs.xls

EU020 Reheat EU020 Reheat 26 of 42
Total Installed Cost 0 Zero out if no replacement parts needed

Annualized Cost 0

Replacement Parts & Equipment:

Equipment Life 3

CRF 0.3811

Rep part cost per unit 0 $ each

Amount Required 0 Number

Total Rep Parts Cost 0 Cost adjusted for freight & sales tax

Installation Labor 0 10 min per bag (13 hr total) Labor at $29.65/hr OAQPS list replacement times from 5 - 20 min per bag.

Total Installed Cost 0 Zero out if no replacement parts needed

Annualized Cost 0

Electrical Use

Flow acfm  P in H2O Efficiency Hp kW

Blower, Thermal 772,000 19 0.6 2,860.3 EPA Cost Cont Manual 6th ed - Oxidizders Chapter 2.5.2.1

Blower, Catalytic 772,000 23 0.6 3,462.4 EPA Cost Cont Manual 6th ed - Oxidizders Chapter 2.5.2.1

Oxidizer Type thermal (catalytic or thermal) 2860.3

Reagent Use & Other Operating Costs Oxidizers - NA

Operating Cost Calculations Annual hours of operation: 8,000

Utilization Rate: 93%

Unit Unit of Use Unit of Annual Annual Comments

Item Cost $ Measure Rate Measure Use* Cost

Operating Labor

Op Labor 48.30 $/Hr 0.5 hr/8 hr shift 500 24,150 $/Hr, 0.5 hr/8 hr shift, 8000 hr/yr

Supervisor 15% of Op. NA 3,623 15% of Operator Costs

Maintenance

Maint Labor 60.00 $/Hr 0.5 hr/8 hr shift 500 30,000 $/Hr, 0.5 hr/8 hr shift, 8000 hr/yr

Maint Mtls 100 % of Maintenance Labor NA 30,000 100% of Maintenance Labor

Utilities, Supplies, Replacements & Waste Management

Electricity 0.041 $/kwh 2860.3 kW-hr 21,280,334 872,494 $/kwh, 2,860 kW-hr, 8000 hr/yr, 93% utilization

Natural Gas 7.41 $/mscf 4,110 scfm 1,834,915 13,596,717 $/mscf, 4,110 scfm, 8000 hr/yr, 93% utilization

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

See Summary page for notes and assumptions

E:\BART\HTC\HTC Control Costs.xls

EU020 Reheat EU020 Reheat 27 of 42
Cleveland Cliffs Incorporated: Hibbing Taconite

BART Report - Appendix A Emission Control Cost Analysis

Table 10: NOx Control - Selective Catalytic Reduction with Reheat

Flue Gas Re-Heat Equipment Cost Estimate Basis Thermal Oxidizer with 70% Heat Recovery

Auxiliary Fuel Use Equation 3.19

Twi 120 Deg F - Temperature of waste gas into heat recovery

Tfi 750 Deg F - Temperature of Flue gas into of heat recovery

Tref 77 Deg F - Reference temperature for fuel combustion calculations

FER 70% Factional Heat Recovery % Heat recovery section efficiency

Two 561 Deg F - Temperature of waste gas out of heat recovery

Tfo 309 Deg F - Temperature of flue gas into of heat recovery

-hcaf 21502 Btu/lb Heat of combustion auxiliary fuel (methane)

-hwg 0 Btu/lb Heat of combustion waste gas

Cp wg 0.2684 Btu/lb - Deg F Heat Capacity of waste gas (air)

p wg 0.0739 lb/scf - Density of waste gas (air) at 77 Deg F

p af 0.0408 lb/scf - Density of auxiliary fuel (methane) at 77 Deg F

Qwg 702,786 scfm - Flow of waste gas

Qaf 4,110 scfm - Flow of auxiliary fuel

Year 2005 Inflation Rate 3.0%

Cost Calculations 706,897 scfm Flue Gas Cost in 1989 $'s $618,834

Current Cost Using CHE Plant Cost Index $737,840

Heat Rec % A B

0 10,294 0.2355 Exponents per equation 3.24

0.3 13,149 0.2609 Exponents per equation 3.25

0.5 17,056 0.2502 Exponents per equation 3.26

0.7 21,342 0.2500 Exponents per equation 3.27

Indurator Flue Gas Heat Capacity - Basis Typical Composition

100 scfm 359 scf/lbmole

Gas Composition lb/hr f wt % Cp Gas Cp Flue

28 mw CO 0 v % 0

44 mw CO2 15 v % 184 22.0% 0.24 0.0528

18 mw H2O 10 v % 50 6.0% 0.46 0.0276

28 mw N2 60 v % 468 56.0% 0.27 0.1512

32 mw O2 15 v % 134 16.0% 0.23 0.0368

Cp Flue Gas 100 v % 836 100.0% 0.2684

Reference: OAQPS Control Cost Manual 5th Ed Feb 1996 - Chapter 3 Thermal & Catalytic Incinerators

(EPA 453/B-96-001)

E:\BART\HTC\HTC Control Costs.xls

EU020 Reheat EU020 Reheat 28 of 42
Cleveland Cliffs Incorporated: Hibbing Taconite

BART Report - Appendix A Emission Control Cost Analysis

Table 11: NOx Control - Selective Catalytic Reduction with Reheat

Operating Unit: Pellet Indurating Furnace Line No 2

Emission Unit Number EU 021 Stack/Vent Number SV025M-SV028M Chemical Engineering

Desgin Capacity 360 MMBtu/hr Standardized Flow Rate 674,379 scfm @ 32o F Chemical Plant Cost Index

Expected Utiliztion Rate 93% Temperature 120 Deg F 1998/1999 390

Expected Annual Hours of Operation 8,000 Hours Moisture Content 7.1% 2005 465

Annual Interest Rate 7.0% Actual Flow Rate 795,000 acfm Inflation Adj 1.19

Expected Equipment Life 20 yrs Standardized Flow Rate 672,448 scfm @ 68o F

Dry Std Flow Rate 650,745 dscfm @ 68o F

CONTROL EQUIPMENT COSTS

Capital Costs Year

Direct Capital Costs EPRI Correlation 1998

Purchased Equipment (A) 2005 26,715,086

Purchased Equipment Total (B) 0% of control device cost (A) SCR Only 28,451,567

Installation - Standard Costs 9% of purchased equip cost (B) SCR Only 2,643,899

Installation - Site Specific Costs 6,200,000

Installation Total 33,271,915

Total Direct Capital Cost, DC 35,759,785

Total Indirect Capital Costs, IC 0% of purchased equip cost (B) 45,119,858

Total Capital Investment (TCI) = DC + IC SCR + Reheat 78,666,631

Operating Costs

Total Annual Direct Operating Costs Labor, supervision, materials, replacement parts, utilities, etc. SCR + Reheat 29,221,312

Total Annual Indirect Operating Costs Sum indirect oper costs + capital recovery cost SCR + Reheat 11,000,707

Total Annual Cost (Annualized Capital Cost + Operating Cost) SCR + Reheat 40,222,018

Emission Control Cost Calculation

Baseline Predicted Limit Cont. Emis. Cont Emis Reduction Cont Cost

Pollutant Emis. T/yr lb/hr lb/MMBtu T/yr T/yr $/Ton Rem

Nitrous Oxides (NOx) 2,143.5 92.6 0.26 344.5 1,799.1 22,357

Notes & Assumptions

1 Estimated Equipment Cost per EPA Air Pollution Control Cost Manual 6th Ed 2002, Section 4.2 Chapter 2.

2 For Calculation purposes, duty reflects increased flow rate, not actual duty.

3 Calculations per EPA Air Pollution Control Cost Manual 6th Ed 2002, Section 4.2 Chapter 2

4 Capital Cost per EPA Air Pollution Control Cost Manual 6th Ed 2002, Section 4.2 Chapter 2 Eq 2.36 -2.43

5 Reagent Use per EPA Air Pollution Control Cost Manual 6th Ed 2002, Section 4.2 Chapter 2 Eq 2.32 - 2.35

6 SCR Catalyst Volume per EPA Air Pollution Control Cost Manual 6th Ed 2002, Section 4.2 Chapter 2 Eq 2.18 - 2.24

7 SCR Reactor Size per EPA Air Pollution Control Cost Manual 6th Ed 2002, Section 4.2 Chapter 2 Eq 2.25 - 2.31

8 SCR Catalyst Replacement per EPA Air Pollution Control Cost Manual 6th Ed 2002, Section 4.2 Chapter 2 Eq 2.50 - 2.53

9 SCR Electrical Demand per EPA Air Pollution Control Cost Manual 6th Ed 2002, Section 4.2 Chapter 2 Eq 2.48

10 SCR Maintenance Costs EPA Air Pollution Control Cost Manual 6th Ed 2002, Section 4.2 Chapter 2 Eq 2.46

11 Control Efficiency = 80% reduction

12 Site-specific electricity cost, 140 MW

13 Catalyst replacement every 8000 hours. This requires an additional 2 week outage per 3 year outage cycle, annualized to 4.7 days.

E:\BART\HTC\HTC Control Costs.xls

EU021 SCR EU021 SCR 29 of 42
Cleveland Cliffs Incorporated: Hibbing Taconite

BART Report - Appendix A Emission Control Cost Analysis

Table 11: NOx Control - Selective Catalytic Reduction with Reheat

CAPITAL COSTS

Direct Capital Costs

Purchased Equipment (A) (1)

Purchased Equipment Costs (A) - Absorber + packing + auxillary equipment, EC 26,715,086

Instrumentation 10% of control device cost (A) NA

MN Sales Taxes 6.5% of control device cost (A) 1,736,481

Freight 5% of control device cost (A) NA

Purchased Equipment Total (A) 28,451,567

Indirect Installation

General Facilities 0% of purchased equip cost (A) 0

Engineering & Home Office 0% of purchased equip cost (A) 0

Process Contingency 0% of purchased equip cost (A) 0

Site Specific-Other 9% Replacement Power, two weeks 2,643,899

Total Indirect Installation Costs (B) 9% of purchased equip cost (A) 2,643,899

Project Contingeny ( C) 15% of (A + B) 4,664,320

Total Plant Cost D A + B + C 35,759,785

Allowance for Funds During Construction (E) Additional 10 week outage for installation 8,232,000

Pre Production Costs (G) 2% of (D+E)) 879,836

Inventory Capital Reagent Vol * $/gal 248,237

Total Capital Investment (TCI) = DC + IC D + E + F + G +H + I 45,119,858

Retrofit multiplier

3

60% of TCI 27,071,915

Sitework and foundations Site Specific 1,400,000

Structural steel Site Specific 4,800,000

Site Specific - Other Site Specific NA

Total Site Specific Costs 6,200,000

Total Capital Investment (TCI) Retrofit Installed 78,391,773

Adjusted TCI for Replacement Parts (Catalyst, Filter Bags, etc) for Capital Recovery Cost NA

OPERATING COSTS

Direct Annual Operating Costs, DC

Operating Labor

Operator 48.30 $/Hr, 2.0 hr/8 hr shift, 8000 hr/yr 96,600

Supervisor 15% 15% of Operator Costs 14,490

Maintenance

Maintenance Total 1.50 % of Total Capital Investment 1,175,877

Maintenance Materials NA % of Maintenance Labor -

Utilities, Supplies, Replacements & Waste Management

Electricity 0.04 $/kwh, 8,948 kW-hr, 8000 hr/yr, 93% utilization 2,729,381

NA NA -

NA NA -

NA NA -

NA NA -

NA NA -

NA NA -

NA NA -

NA NA -

NA NA -

Cat. Replacement [14] 64.71 Catalyst Replacement 4,645,603

NA NA -

Ammonia 0.12 $/lb, 7,315 lb/hr, 8000 hr/yr, 93% utilization 6,563,327

NA NA -

NA NA -

NA NA -

Total Annual Direct Operating Costs 15,225,278

Indirect Operating Costs

Overhead 60% of total labor and material costs 105,792

Administration (2% total capital costs) 2% of total capital costs (TCI) 1,567,835

Property tax (1% total capital costs) 1% of total capital costs (TCI) 783,918

Insurance (1% total capital costs) 1% of total capital costs (TCI) 783,918

Capital Recovery 0.0944 for a 20- year equipment life and a 7% interest rate 7,399,629

Total Annual Indirect Operating Costs Sum indirect oper costs + capital recovery cost 10,641,091

Total Annual Cost (Annualized Capital Cost + Operating Cost) 25,866,370

E:\BART\HTC\HTC Control Costs.xls

EU021 SCR EU021 SCR 30 of 42
Cleveland Cliffs Incorporated: Hibbing Taconite

BART Report - Appendix A Emission Control Cost Analysis

Table 11: NOx Control - Selective Catalytic Reduction with Reheat

Capital Recovery Factors

Primary Installation

Interest Rate 7.00%

Equipment Life 20 years

CRF 0.0944

Equivalent Duty 4,244 Plant Cap kWA 435,325

Est power platn eff 35% Unc Nox lb/mBmBtu 1.29 D=75*(300,000)*((B/1.5)^0.05*(C/100)^0.04)A)^0.35

Watt per Btu/hr 0.29307 Nox Red. Eff.C 80% E=D*A*0.0066

Equivalent power plant kW 435,325 Capital Cost $/kW D $61.37 $26,715,086.02 Total SCR Equipment

Uncontrolled Nox t/y 2,143.5 Fixed O&M E $176,319.57

Annual Operating Hrs 8000 Variable O&MF $772,486.47

Uncontrolled Nox lb/mmBtu 1.286 Ann Cap FactGor 0.82

Heat Input mmHBtu/hr 6,000

SCR Capital Cost

Duty 4,244 MMBtu/hr Catalyst Area 2,047 ft

2

921 f (h SCR)

Q flue gas 1,965,552 acfm Rx Area 2,355 -15 f (h NH3

)

NOx Cont Eff 80% (as faction) Rx Height 48.5 ft 0 f (h New) new= -728, Retrofit = 0

NOx in 1.29 lb/MMBtu n layer 34 layers Y Bypass? Y or N

Ammonia Slip 2 ppm h layer 36.1 ft 127 f (h Bypass)

Fuel Sulfur 0.67 wt % (as %) n total 35 layers 51,689,603 f (vol catalyst)

Temperature 120 Deg F h SCR 181 ft f (h SCR)

Catalyst Volume 215,373 ft

3

New/Retrofit R N or R

Electrical Use

Duty 4,244 MMBtu/hr kW

NOx Cont Eff 80% (as faction) Power 8,947.6

NOx in 1.29 lb/MMBtu

n catalyst layers 35 layers

Press drop catalyst 1 in H2O per layer

Press drop duct 3 in H2O

Total 8947.6

Reagent Use & Other Operating Costs

Ammonia Use 56.0 lb/ft

3 Density

2121 lb/hr Neat 977.2 gal/hr

29% solution Volume 14 day inventory 328,335 gal $248,237 Inventory Cost

7315 lb/hr

Design Basis Baseline EmisB.aseline EmisM. ax Emis. (Model) Control Eff (%) Cont. Emis (lb/MMBtu)

T/yr lb/MMBtu lb/hr 80% 0.26

Nitrous Oxide 2,143.5 1.3 463.00

Actual 108,457 dscf/MMBtu

Method 19 Factor 9,200 dscf/MMBtu

Adjusted Duty 4,244 MMBtu/hr

Operating Cost Calculations Annual hours of operation: 8,000

Utilization Rate: 93%

Unit Unit of Use Unit of Annual Annual Comments

Item Cost $ Measure Rate Measure Use* Cost

Operating Labor

Op Labor 48.30 $/Hr 2.0 hr/8 hr shift 2,000 96,600 $/Hr, 2.0 hr/8 hr shift, 8000 hr/yr

Supervisor 15% of Op. NA 14,490 15% of Operator Costs

Maintenance

Maintenance Total 1.5 % of Total Capital Investment 1,175,877 % of Total Capital Investment

Maint Mtls 0 % of Maintenance Labor NA 0 0% of Maintenance Labor

Utilities, Supplies, Replacements & Waste Management

Electricity 0.041 $/kwh 8947.6 kW-hr 66,570,279 2,729,381 $/kwh, 8,948 kW-hr, 8000 hr/yr, 93% utilization

Cat. Replacement [14] 65 $/ft3 71,791 4,645,603 Catalyst Replacement

7 Ammonia 0.12 $/lb 7315 lb/hr 54,422,606 6,563,327 $/lb, 7,315 lb/hr, 8000 hr/yr, 93% utilization

** Std Air use is 2 scfm/kacfm *annual use rate is in same units of measurement as the unit cost factor

See Summary page for notes and assumptions

E:\BART\HTC\HTC Control Costs.xls

EU021 SCR EU021 SCR 31 of 42
Cleveland Cliffs Incorporated: Hibbing Taconite

BART Report - Appendix A Emission Control Cost Analysis

Table 12: NOx Control - Selective Catalytic Reduction with Reheat

Operating Unit: Pellet Indurating Furnace Line No 2

Emission Unit Number EU 021 Stack/Vent Number SV025M-SV028M Chemical Engineering

Desgin Capacity 190 MMBtu/hr Standardized Flow Rate 674,379 scfm @ 32o F Chemical Plant Cost Index

Expected Utiliztion Rate 93% Temperature 120 Deg F 1998/1999 390

Expected Annual Hours of Operation 8,000 Hours Moisture Content 7.1% 2005 465

Annual Interest Rate 7.0% Actual Flow Rate 795,000 acfm Inflation Adj 1.19

Expected Equipment Life 20 yrs Standardized Flow Rate 672,448 scfm @ 68o F

Dry Std Flow Rate 650,745 dscfm @ 68o F

CONTROL EQUIPMENT COSTS

Capital Costs

Direct Capital Costs

Purchased Equipment (A) 729,745

Purchased Equipment Total (B) 22% of control device cost (A) 886,641

Installation - Standard Costs 30% of purchased equip cost (B) 265,992

Installation - Site Specific Costs NA

Installation Total 265,992

Total Direct Capital Cost, DC 1,152,633

Total Indirect Capital Costs, IC 31% of purchased equip cost (B) 274,859

Total Capital Investment (TCI) = DC + IC 2,283,986

Operating Costs

Total Annual Direct Operating Costs Labor, supervision, materials, replacement parts, utilities, etc. 13,996,033

Total Annual Indirect Operating Costs Sum indirect oper costs + capital recovery cost 359,615

Total Annual Cost (Annualized Capital Cost + Operating Cost) 14,355,648

Notes & Assumptions

1 Equipment cost estimate EPA Air Pollution Control Cost Manual 6th Ed 2002, Section 3.2 Chapter 2.5.1

2 Calculations per EPA Air Pollution Control Cost Manual 6th Ed 2002, Section 3.2 Chapter 2

E:\BART\HTC\HTC Control Costs.xls

EU021 Reheat EU021 Reheat 32 of 42
Cleveland Cliffs Incorporated: Hibbing Taconite

BART Report - Appendix A Emission Control Cost Analysis

Table 12: NOx Control - Selective Catalytic Reduction with Reheat

CAPITAL COSTS

Direct Capital Costs

Purchased Equipment (A) (1) 729,745

Purchased Equipment Costs (A) - Absorber + packing + auxillary equipment, EC

Instrumentation 10% of control device cost (A) 72,975

MN Sales Taxes 6.5% of control device cost (A) 47,433

Freight 5% of control device cost (A) 36,487

Purchased Equipment Total (B) 22% 886,641

Installation

Foundations & supports 8% of purchased equip cost (B) 70,931

Handling & erection 14% of purchased equip cost (B) 124,130

Electrical 4% of purchased equip cost (B) 35,466

Piping 2% of purchased equip cost (B) 17,733

Insulation 1% of purchased equip cost (B) 8,866

Painting 1% of purchased equip cost (B) 8,866

Installation Subtotal Standard Expenses 30% 265,992

Site Preparation, as required Included in SCR 0

Buildings, as required Included in SCR 0

Site Specific - Other Included in SCR 0

Total Site Specific Costs NA

Installation Total 265,992

Total Direct Capital Cost, DC 1,152,633

Indirect Capital Costs

Engineering, supervision 10% of purchased equip cost (B) 88,664

Construction & field expenses 5% of purchased equip cost (B) 44,332

Contractor fees 10% of purchased equip cost (B) 88,664

Start-up 2% of purchased equip cost (B) 17,733

Performance test 1% of purchased equip cost (B) 8,866

Model Studies of purchased equip cost (B) 0

Contingencies 3% of purchased equip cost (B) 26,599

Total Indirect Capital Costs, IC 31% of purchased equip cost (B) 274,859

Total Capital Investment (TCI) = DC + IC 1,427,491

Retrofit multiplier

3

60% of TCI 856,495

Total Capital Investment (TCI) Retrofit Installed 2,283,986

Adjusted TCI for Replacement Parts (Catalyst, Filter Bags, etc) for Capital Recovery Cost 2,283,986

OPERATING COSTS

Direct Annual Operating Costs, DC

Operating Labor

Operator 48.30 $/Hr, 0.5 hr/8 hr shift, 8000 hr/yr 24,150

Supervisor 15% 15% of Operator Costs 3,623

Maintenance

Maintenance Labor 60.00 $/Hr, 0.5 hr/8 hr shift, 8000 hr/yr 30,000

Maintenance Materials 100% of maintenance labor costs 30,000

Utilities, Supplies, Replacements & Waste Management

Electricity 0.04 $/kwh, 2,945 kW-hr, 8000 hr/yr, 93% utilization 898,488

Natural Gas 7.41 $/mscf, 3,933 scfm, 8000 hr/yr, 93% utilization 13,009,773

Total Annual Direct Operating Costs 13,996,033

Indirect Operating Costs

Overhead 60% of total labor and material costs 52,664

Administration (2% total capital costs) 2% of total capital costs (TCI) 45,680

Property tax (1% total capital costs) 1% of total capital costs (TCI) 22,840

Insurance (1% total capital costs) 1% of total capital costs (TCI) 22,840

Capital Recovery 0.0944 for a 20- year equipment life and a 7% interest rate 215,592

Total Annual Indirect Operating Costs Sum indirect oper costs + capital recovery cost 359,615

Total Annual Cost (Annualized Capital Cost + Operating Cost) 14,355,648

See Summary page for notes and assumptions

E:\BART\HTC\HTC Control Costs.xls

EU021 Reheat EU021 Reheat 33 of 42
Cleveland Cliffs Incorporated: United Taconite

BART Report - <Insert attachment name> Emission Control Cost Analysis

<Insert Table Name>: - Summary of Utility, Chemical and Supply Costs

Capital Recovery Factors

Primary Installation

Interest Rate 7.00%

Equipment Life 20 years

CRF 0.0944

Replacement Catalyst: Catalyst

Equipment Life 2 years

CRF 0.5531

Rep part cost per unit 0 $/ft

3

Amount Required 39 ft

3

Catalyst Cost 0 Cost adjusted for freight & sales tax

Installation Labor 0 Assume Labor = 15% of catalyst cost (basis labor for baghouse replacement)

Total Installed Cost 0 Zero out if no replacement parts needed

Annualized Cost 0

Replacement Parts & Equipment:

Equipment Life 3

CRF 0.3811

Rep part cost per unit 0 $ each

Amount Required 0 Number

Total Rep Parts Cost 0 Cost adjusted for freight & sales tax

Installation Labor 0 10 min per bag (13 hr total) Labor at $29.65/hr OAQPS list replacement times from 5 - 20 min per bag.

Total Installed Cost 0 Zero out if no replacement parts needed

Annualized Cost 0

Electrical Use

Flow acfm  P in H2O Efficiency Hp kW

Blower, Thermal 795,000 19 0.6 2,945.5 EPA Cost Cont Manual 6th ed - Oxidizders Chapter 2.5.2.1

Blower, Catalytic 795,000 23 0.6 3,565.6 EPA Cost Cont Manual 6th ed - Oxidizders Chapter 2.5.2.1

Oxidizer Type thermal (catalytic or thermal) 2945.5

Reagent Use & Other Operating Costs Oxidizers - NA

Operating Cost Calculations Annual hours of operation: 8,000

Utilization Rate: 93%

Unit Unit of Use Unit of Annual Annual Comments

Item Cost $ Measure Rate Measure Use* Cost

Operating Labor

Op Labor 48.30 $/Hr 0.5 hr/8 hr shift 500 24,150 $/Hr, 0.5 hr/8 hr shift, 8000 hr/yr

Supervisor 15% of Op. NA 3,623 15% of Operator Costs

Maintenance

Maint Labor 60.00 $/Hr 0.5 hr/8 hr shift 500 30,000 $/Hr, 0.5 hr/8 hr shift, 8000 hr/yr

Maint Mtls 100 % of Maintenance Labor NA 30,000 100% of Maintenance Labor

Utilities, Supplies, Replacements & Waste Management

Electricity 0.041 $/kwh 2945.5 kW-hr 21,914,334 898,488 $/kwh, 2,945 kW-hr, 8000 hr/yr, 93% utilization

Natural Gas 7.41 $/mscf 3,933 scfm 1,755,705 13,009,773 $/mscf, 3,933 scfm, 8000 hr/yr, 93% utilization

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

See Summary page for notes and assumptions

E:\BART\HTC\HTC Control Costs.xls

EU021 Reheat EU021 Reheat 34 of 42
Cleveland Cliffs Incorporated: Hibbing Taconite

BART Report - Appendix A Emission Control Cost Analysis

Table 12: NOx Control - Selective Catalytic Reduction with Reheat

Flue Gas Re-Heat Equipment Cost Estimate Basis Thermal Oxidizer with 70% Heat Recovery

Auxiliary Fuel Use Equation 3.19

Twi 120 Deg F - Temperature of waste gas into heat recovery

Tfi 750 Deg F - Temperature of Flue gas into of heat recovery

Tref 77 Deg F - Reference temperature for fuel combustion calculations

FER 70% Factional Heat Recovery % Heat recovery section efficiency

Two 561 Deg F - Temperature of waste gas out of heat recovery

Tfo 309 Deg F - Temperature of flue gas into of heat recovery

-hcaf 21502 Btu/lb Heat of combustion auxiliary fuel (methane)

-hwg 0 Btu/lb Heat of combustion waste gas

Cp wg 0.2684 Btu/lb - Deg F Heat Capacity of waste gas (air)

p wg 0.0739 lb/scf - Density of waste gas (air) at 77 Deg F

p af 0.0408 lb/scf - Density of auxiliary fuel (methane) at 77 Deg F

Qwg 672,448 scfm - Flow of waste gas

Qaf 3,933 scfm - Flow of auxiliary fuel

Year 2005 Inflation Rate 3.0%

Cost Calculations 676,381 scfm Flue Gas Cost in 1989 $'s $612,045

Current Cost Using CHE Plant Cost Index $729,745

Heat Rec % A B

0 10,294 0.2355 Exponents per equation 3.24

0.3 13,149 0.2609 Exponents per equation 3.25

0.5 17,056 0.2502 Exponents per equation 3.26

0.7 21,342 0.2500 Exponents per equation 3.27

Indurator Flue Gas Heat Capacity - Basis Typical Composition

100 scfm 359 scf/lbmole

Gas Composition lb/hr f wt % Cp Gas Cp Flue

28 mw CO 0 v % 0

44 mw CO2 15 v % 184 22.0% 0.24 0.0528

18 mw H2O 10 v % 50 6.0% 0.46 0.0276

28 mw N2 60 v % 468 56.0% 0.27 0.1512

32 mw O2 15 v % 134 16.0% 0.23 0.0368

Cp Flue Gas 100 v % 836 100.0% 0.2684

Reference: OAQPS Control Cost Manual 5th Ed Feb 1996 - Chapter 3 Thermal & Catalytic Incinerators

(EPA 453/B-96-001)

E:\BART\HTC\HTC Control Costs.xls

EU021 Reheat EU021 Reheat 35 of 42
Cleveland Cliffs Incorporated: Hibbing Taconite

BART Report - Appendix A Emission Control Cost Analysis

Table 13: NOx Control - Selective Catalytic Reduction with Reheat

Operating Unit: Pellet Indurating Furnace Line No 3

Emission Unit Number EU 022 Stack/Vent Number SV029M-SV032M

Desgin Capacity 360 MMBtu/hr Standardized Flow Rate 701,524 scfm @ 32o F

Expected Utiliztion Rate 93% Temperature 120 Deg F

Expected Annual Hours of Operation 8,000 Hours Moisture Content 8.5%

Annual Interest Rate 7.0% Actual Flow Rate 827,000 acfm

Expected Equipment Life 20 yrs Standardized Flow Rate 752,855 scfm @ 68o F

Dry Std Flow Rate 689,013 dscfm @ 68o F

CONTROL EQUIPMENT COSTS

Capital Costs

Direct Capital Costs

Purchased Equipment (A) 27,816,716

Purchased Equipment Total (B) SCR Only 29,624,802

Installation - Standard Costs 9% of purchased equip cost (B) SCR Only 2,643,899

Installation - Site Specific Costs 6,200,000

Installation Total 34,138,755

Total Direct Capital Cost, DC 37,109,006

Total Indirect Capital Costs, IC 9,455,585

Total Capital Investment (TCI) = DC + IC SCR + Reheat 83,052,744

Operating Costs

Total Annual Direct Operating Costs Labor, supervision, materials, replacement parts, utilities, etc. SCR + Reheat 29,360,788

Total Annual Indirect Operating Costs Sum indirect oper costs + capital recovery cost SCR + Reheat 11,324,519

Total Annual Cost (Annualized Capital Cost + Operating Cost) SCR + Reheat 40,685,307

Emission Control Cost Calculation

Baseline Predicted Limit Cont. Emis. Cont Emis Reduction Cont Cost

Pollutant Emis. T/yr lb/hr lb/MMBtu T/yr T/yr $/Ton Rem

Nitrous Oxides (NOx) 2,247.1 111.6 0.31 415.2 1,832.0 22,208

Notes & Assumptions

1 Estimated Equipment Cost per EPA Air Pollution Control Cost Manual 6th Ed 2002, Section 4.2 Chapter 2.

2 For Calculation purposes, duty reflects increased flow rate, not actual duty.

3 Calculations per EPA Air Pollution Control Cost Manual 6th Ed 2002, Section 4.2 Chapter 2

4 Capital Cost per EPA Air Pollution Control Cost Manual 6th Ed 2002, Section 4.2 Chapter 2 Eq 2.36 -2.43

5 Reagent Use per EPA Air Pollution Control Cost Manual 6th Ed 2002, Section 4.2 Chapter 2 Eq 2.32 - 2.35

6 SCR Catalyst Volume per EPA Air Pollution Control Cost Manual 6th Ed 2002, Section 4.2 Chapter 2 Eq 2.18 - 2.24

7 SCR Reactor Size per EPA Air Pollution Control Cost Manual 6th Ed 2002, Section 4.2 Chapter 2 Eq 2.25 - 2.31

8 SCR Catalyst Replacement per EPA Air Pollution Control Cost Manual 6th Ed 2002, Section 4.2 Chapter 2 Eq 2.50 - 2.53

9 SCR Electrical Demand per EPA Air Pollution Control Cost Manual 6th Ed 2002, Section 4.2 Chapter 2 Eq 2.48

10 SCR Maintenance Costs EPA Air Pollution Control Cost Manual 6th Ed 2002, Section 4.2 Chapter 2 Eq 2.46

11 Control Efficiency = 90% reduction which is typically the upper range of normal SCR control efficiency

12 $35/MW-hr, 140 MW

13 Catalyst replacement every 8000 hours. This requires an additional 2 week outage per 3 year outage cycle, annualized to 4.7 days.

Notes to User

E:\BART\HTC\HTC Control Costs.xls

EU022 SCR EU022 SCR 36 of 42
Cleveland Cliffs Incorporated: Hibbing Taconite

BART Report - Appendix A Emission Control Cost Analysis

Table 13: NOx Control - Selective Catalytic Reduction with Reheat

CAPITAL COSTS

Direct Capital Costs

Purchased Equipment (A) (1)

Purchased Equipment Costs (A) - Absorber + packing + auxillary equipment, EC 27,816,716

Instrumentation 10% of control device cost (A) NA

MN Sales Taxes 6.5% of control device cost (A) 1,808,087

Freight 5% of control device cost (A) NA

Purchased Equipment Total (A) 29,624,802

Indirect Installation

General Facilities 0% of purchased equip cost (A) 0

Engineering & Home Office 0% of purchased equip cost (A) 0

Process Contingency 0% of purchased equip cost (A) 0

Site Specific-Other 9% Replacement Power, two weeks 2,643,899

Total Indirect Installation Costs (B) 9% of purchased equip cost (A) 2,643,899

Project Contingeny ( C) 15% of (A + B) 4,840,305

Total Plant Cost D A + B + C 37,109,006

Allowance for Funds During Construction (E) Additional 10 week outage for installation 8,232,000

Pre Production Costs (G) 2% of (D+E)) 906,820

Inventory Capital Reagent Vol * $/gal 316,765

Total Capital Investment (TCI) = DC + IC D + E + F + G +H + I 46,564,591

Retrofit multiplier

3

60% of TCI 27,938,755

Sitework and foundations Site Specific 1,400,000

Structural steel Site Specific 4,800,000

Site Specific - Other Site Specific NA

Total Site Specific Costs 6,200,000

Total Capital Investment (TCI) Retrofit Installed 80,703,346

Adjusted TCI for Replacement Parts (Catalyst, Filter Bags, etc) for Capital Recovery Cost NA

OPERATING COSTS

Direct Annual Operating Costs, DC

Operating Labor

Operator 48.30 $/Hr, 2.0 hr/8 hr shift, 8000 hr/yr 96,600

Supervisor 15% 15% of Operator Costs 14,490

Maintenance

Maintenance Total 1.50 % of Total Capital Investment 1,210,550

Maintenance Materials NA % of Maintenance Labor -

Utilities, Supplies, Replacements & Waste Management

Electricity 0.04 $/kwh, 10,047 kW-hr, 8000 hr/yr, 93% utilization 3,064,634

NA NA -

NA NA -

NA NA -

NA NA -

NA NA -

NA NA -

NA NA -

NA NA -

NA NA -

Cat. Replacement [14] 64.51 Catalyst Replacement 1,011,517

NA NA -

Ammonia 0.12 $/lb, 9,334 lb/hr, 8000 hr/yr, 93% utilization 8,375,176

NA NA -

NA NA -

NA NA -

Total Annual Direct Operating Costs 13,772,967

Indirect Operating Costs

Overhead 60% of total labor and material costs 110,154

Administration (2% total capital costs) 2% of total capital costs (TCI) 1,614,067

Property tax (1% total capital costs) 1% of total capital costs (TCI) 807,033

Insurance (1% total capital costs) 1% of total capital costs (TCI) 807,033

Capital Recovery 0.0944 for a 20- year equipment life and a 7% interest rate 7,617,825

Total Annual Indirect Operating Costs Sum indirect oper costs + capital recovery cost 10,956,113

Total Annual Cost (Annualized Capital Cost + Operating Cost) 24,729,080

E:\BART\HTC\HTC Control Costs.xls

EU022 SCR EU022 SCR 37 of 42
Cleveland Cliffs Incorporated: Hibbing Taconite

BART Report - Appendix A Emission Control Cost Analysis

Table 13: NOx Control - Selective Catalytic Reduction with Reheat

Capital Recovery Factors

Primary Installation

Interest Rate 7.00%

Equipment Life 20 years

CRF 0.0944

Equivalent Duty 4,494 Plant Cap kWA 460,925

Est power platn eff 35% Unc Nox lb/mBmBtu 1.55 D=75*(300,000)*((B/1.5)^0.05*(C/100)^0.04)A)^0.35

Watt per Btu/hr 0.29307 Nox Red. Eff.C 80% E=D*A*0.0066

Equivalent power plant kW 460,925 Capital Cost $/kW D $60.35 $27,816,715.78 Total SCR Equipment

Uncontrolled Nox t/y 2,247.1 Fixed O&M E $183,590.32

Annual Operating Hrs 8000 Variable O&MF $818,783.80

Uncontrolled Nox lb/mmBtu 1.550 Ann Cap FactGor 0.82

Heat Input mmHBtu/hr 6,000

SCR Capital Cost

SCR Capital Cost per EPRI Method 76,792,214

Duty 4,494 MMBtu/hr Catalyst Area 2,168 ft

2

979 f (h SCR)

Q flue gas 2,081,140 acfm Rx Area 2,493 -17 f (h NH3

)

NOx Cont Eff 80% (as faction) Rx Height 49.9 ft 0 f (h New) new= -728, Retrofit = 0

NOx in 1.55 lb/MMBtu n layer 36 layers Y Bypass? Y or N

Ammonia Slip 2 ppm h layer 38.4 ft 127 f (h Bypass)

Fuel Sulfur 0.67 wt % (as %) n total 37 layers 58,391,904 f (vol catalyst)

Temperature 120 Deg F h SCR 191 ft f (h SCR)

Catalyst Volume 243,300 ft

3

New/Retrofit R N or R

Electrical Use

Duty 4,494 MMBtu/hr kW

NOx Cont Eff 80% (as faction) Power 10,046.7

NOx in 1.55 lb/MMBtu

n catalyst layers 37 layers

Press drop catalyst 1 in H2O per layer

Press drop duct 3 in H2O

Total 10046.7

Reagent Use & Other Operating Costs

Ammonia Use 56.0 lb/ft

3 Density

2707 lb/hr Neat 1246.9 gal/hr

29% solution Volume 14 day inventory 418,974 gal $316,765 Inventory Cost

9334 lb/hr

Design Basis Baseline EmisB.aseline EmisM. ax Emis. (Model) Control Eff (%) Cont. Emis (lb/MMBtu)

T/yr lb/MMBtu lb/hr 80% 0.31

Nitrous Oxides (NOx) 2,247.1 1.6 526.00

Actual 114,836 dscf/MMBtu

Method 19 Factor 9,200 dscf/MMBtu

Adjusted Duty 4,494 MMBtu/hr

Operating Cost Calculations Annual hours of operation: 8,000

Utilization Rate: 93%

Unit Unit of Use Unit of Annual Annual Comments

Item Cost $ Measure Rate Measure Use* Cost

Operating Labor

Op Labor 48.30 $/Hr 2.0 hr/8 hr shift 2,000 96,600 $/Hr, 2.0 hr/8 hr shift, 8000 hr/yr

Supervisor 15% of Op. NA 14,490 15% of Operator Costs

Maintenance

Maintenance Total 1.5 % of Total Capital Investment 1,210,550 % of Total Capital Investment

Maint Mtls 0 % of Maintenance Labor NA 0 0% of Maintenance Labor

Utilities, Supplies, Replacements & Waste Management

Electricity 0.041 $/kwh 10046.7 kW-hr 74,747,163 3,064,634 $/kwh, 10,047 kW-hr, 8000 hr/yr, 93% utilization

Cat. Replacement [14] 65 $/MW-hr 140.0 mw 112 1,011,517 Catalyst Replacement

7 Ammonia 0.12 $/lb 9334 lb/hr 69,446,318 8,375,176 $/lb, 9,334 lb/hr, 8000 hr/yr, 93% utilization

** Std Air use is 2 scfm/kacfm *annual use rate is in same units of measurement as the unit cost factor

See Summary page for notes and assumptions

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Cleveland Cliffs Incorporated: Hibbing Taconite

BART Report - Appendix A Emission Control Cost Analysis

Table 14: NOx Control - Selective Catalytic Reduction with Reheat

Operating Unit: Pellet Indurating Furnace Line No 3

Emission Unit Number EU 022 Stack/Vent Number SV029M-SV032M Chemical Engineering

Desgin Capacity 190 MMBtu/hr Standardized Flow Rate 701,524 scfm @ 32o F Chemical Plant Cost Index

Expected Utiliztion Rate 93% Temperature 120 Deg F 1998/1999 390

Expected Annual Hours of Operation 8,000 Hours Moisture Content 8.5% 2005 465

Annual Interest Rate 7.0% Actual Flow Rate 827,000 acfm Inflation Adj 1.19

Expected Equipment Life 20 yrs Standardized Flow Rate 752,855 scfm @ 68o F

Dry Std Flow Rate 689,013 dscfm @ 68o F

CONTROL EQUIPMENT COSTS

Capital Costs

Direct Capital Costs

Purchased Equipment (A) 750,645

Purchased Equipment Total (B) 22% of control device cost (A) 912,033

Installation - Standard Costs 30% of purchased equip cost (B) 273,610

Installation - Site Specific Costs NA

Installation Total 273,610

Total Direct Capital Cost, DC 1,185,644

Total Indirect Capital Costs, IC 31% of purchased equip cost (B) 282,730

Total Capital Investment (TCI) = DC + IC 2,349,398

Operating Costs

Total Annual Direct Operating Costs Labor, supervision, materials, replacement parts, utilities, etc. 15,587,821

Total Annual Indirect Operating Costs Sum indirect oper costs + capital recovery cost 368,406

Total Annual Cost (Annualized Capital Cost + Operating Cost) 15,956,227

Notes & Assumptions

1 Equipment cost estimate EPA Air Pollution Control Cost Manual 6th Ed 2002, Section 3.2 Chapter 2.5.1

2 Calculations per EPA Air Pollution Control Cost Manual 6th Ed 2002, Section 3.2 Chapter 2

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Cleveland Cliffs Incorporated: Hibbing Taconite

BART Report - Appendix A Emission Control Cost Analysis

Table 14: NOx Control - Selective Catalytic Reduction with Reheat

CAPITAL COSTS

Direct Capital Costs

Purchased Equipment (A) (1) 750,645

Purchased Equipment Costs (A) - Absorber + packing + auxillary equipment, EC

Instrumentation 10% of control device cost (A) 75,064

MN Sales Taxes 6.5% of control device cost (A) 48,792

Freight 5% of control device cost (A) 37,532

Purchased Equipment Total (B) 22% 912,033

Installation

Foundations & supports 8% of purchased equip cost (B) 72,963

Handling & erection 14% of purchased equip cost (B) 127,685

Electrical 4% of purchased equip cost (B) 36,481

Piping 2% of purchased equip cost (B) 18,241

Insulation 1% of purchased equip cost (B) 9,120

Painting 1% of purchased equip cost (B) 9,120

Installation Subtotal Standard Expenses 30% 273,610

Site Preparation, as required Included in SCR 0

Buildings, as required Included in SCR 0

Site Specific - Other Included in SCR NA

Total Site Specific Costs NA

Installation Total 273,610

Total Direct Capital Cost, DC 1,185,644

Indirect Capital Costs

Engineering, supervision 10% of purchased equip cost (B) 91,203

Construction & field expenses 5% of purchased equip cost (B) 45,602

Contractor fees 10% of purchased equip cost (B) 91,203

Start-up 2% of purchased equip cost (B) 18,241

Performance test 1% of purchased equip cost (B) 9,120

Model Studies of purchased equip cost (B) 0

Contingencies 3% of purchased equip cost (B) 27,361

Total Indirect Capital Costs, IC 31% of purchased equip cost (B) 282,730

Total Capital Investment (TCI) = DC + IC 1,468,374

Retrofit multiplier

3

60% of TCI 881,024

Total Capital Investment (TCI) Retrofit Installed 2,349,398

Adjusted TCI for Replacement Parts (Catalyst, Filter Bags, etc) for Capital Recovery Cost 2,349,398

OPERATING COSTS

Direct Annual Operating Costs, DC

Operating Labor

Operator 48.30 $/Hr, 0.5 hr/8 hr shift, 8000 hr/yr 24,150

Supervisor 15% 15% of Operator Costs 3,623

Maintenance

Maintenance Labor 60.00 $/Hr, 0.5 hr/8 hr shift, 8000 hr/yr 30,000

Maintenance Materials 100% of maintenance labor costs 30,000

Utilities, Supplies, Replacements & Waste Management

Electricity 0.04 $/kwh, 3,064 kW-hr, 8000 hr/yr, 93% utilization 934,653

Natural Gas 7.41 $/mscf, 4,403 scfm, 8000 hr/yr, 93% utilization 14,565,395

Total Annual Direct Operating Costs 15,587,821

Indirect Operating Costs

Overhead 60% of total labor and material costs 52,664

Administration (2% total capital costs) 2% of total capital costs (TCI) 46,988

Property tax (1% total capital costs) 1% of total capital costs (TCI) 23,494

Insurance (1% total capital costs) 1% of total capital costs (TCI) 23,494

Capital Recovery 0.0944 for a 20- year equipment life and a 7% interest rate 221,767

Total Annual Indirect Operating Costs Sum indirect oper costs + capital recovery cost 368,406

Total Annual Cost (Annualized Capital Cost + Operating Cost) 15,956,227

See Summary page for notes and assumptions

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Cleveland Cliffs Incorporated: United Taconite

BART Report - <Insert attachment name> Emission Control Cost Analysis

<Insert Table Name>: - Summary of Utility, Chemical and Supply Costs

Capital Recovery Factors

Primary Installation

Interest Rate 7.00%

Equipment Life 20 years

CRF 0.0944

Replacement Catalyst: Catalyst

Equipment Life 2 years

CRF 0.5531

Rep part cost per unit 0 $/ft

3

Amount Required 39 ft

3

Catalyst Cost 0 Cost adjusted for freight & sales tax

Installation Labor 0 Assume Labor = 15% of catalyst cost (basis labor for baghouse replacement)

Total Installed Cost 0 Zero out if no replacement parts needed

Annualized Cost 0

Replacement Parts & Equipment:

Equipment Life 3

CRF 0.3811

Rep part cost per unit 0 $ each

Amount Required 0 Number

Total Rep Parts Cost 0 Cost adjusted for freight & sales tax

Installation Labor 0 10 min per bag (13 hr total) Labor at $29.65/hr OAQPS list replacement times from 5 - 20 min per bag.

Total Installed Cost 0 Zero out if no replacement parts needed

Annualized Cost 0

Electrical Use

Flow acfm  P in H2O Efficiency Hp kW

Blower, Thermal 827,000 19 0.6 3,064.0 EPA Cost Cont Manual 6th ed - Oxidizders Chapter 2.5.2.1

Blower, Catalytic 827,000 23 0.6 3,709.1 EPA Cost Cont Manual 6th ed - Oxidizders Chapter 2.5.2.1

Oxidizer Type thermal (catalytic or thermal) 3064.0

Reagent Use & Other Operating Costs Oxidizers - NA

Operating Cost Calculations Annual hours of operation: 8,000

Utilization Rate: 93%

Unit Unit of Use Unit of Annual Annual Comments

Item Cost $ Measure Rate Measure Use* Cost

Operating Labor

Op Labor 48.30 $/Hr 0.5 hr/8 hr shift 500 24,150 $/Hr, 0.5 hr/8 hr shift, 8000 hr/yr

Supervisor 15% of Op. NA 3,623 15% of Operator Costs

Maintenance

Maint Labor 60.00 $/Hr 0.5 hr/8 hr shift 500 30,000 $/Hr, 0.5 hr/8 hr shift, 8000 hr/yr

Maint Mtls 100 % of Maintenance Labor NA 30,000 100% of Maintenance Labor

Utilities, Supplies, Replacements & Waste Management

Electricity 0.041 $/kwh 3064.0 kW-hr 22,796,420 934,653 $/kwh, 3,064 kW-hr, 8000 hr/yr, 93% utilization

Natural Gas 7.41 $/mscf 4,403 scfm 1,965,640 14,565,395 $/mscf, 4,403 scfm, 8000 hr/yr, 93% utilization

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

See Summary page for notes and assumptions

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Cleveland Cliffs Incorporated: Hibbing Taconite

BART Report - Appendix A Emission Control Cost Analysis

Table 14: NOx Control - Selective Catalytic Reduction with Reheat

Flue Gas Re-Heat Equipment Cost Estimate Basis Thermal Oxidizer with 70% Heat Recovery

Auxiliary Fuel Use Equation 3.19

Twi 120 Deg F - Temperature of waste gas into heat recovery

Tfi 750 Deg F - Temperature of Flue gas into of heat recovery

Tref 77 Deg F - Reference temperature for fuel combustion calculations

FER 70% Factional Heat Recovery % Heat recovery section efficiency

Two 561 Deg F - Temperature of waste gas out of heat recovery

Tfo 309 Deg F - Temperature of flue gas into of heat recovery

-hcaf 21502 Btu/lb Heat of combustion auxiliary fuel (methane)

-hwg 0 Btu/lb Heat of combustion waste gas

Cp wg 0.2684 Btu/lb - Deg F Heat Capacity of waste gas (air)

p wg 0.0739 lb/scf - Density of waste gas (air) at 77 Deg F

p af 0.0408 lb/scf - Density of auxiliary fuel (methane) at 77 Deg F

Qwg 752,855 scfm - Flow of waste gas

Qaf 4,403 scfm - Flow of auxiliary fuel

Year 2005 Inflation Rate 3.0%

Cost Calculations 757,258 scfm Flue Gas Cost in 1989 $'s $629,573

Current Cost Using CHE Plant Cost Index $750,645

Heat Rec % A B

0 10,294 0.2355 Exponents per equation 3.24

0.3 13,149 0.2609 Exponents per equation 3.25

0.5 17,056 0.2502 Exponents per equation 3.26

0.7 21,342 0.2500 Exponents per equation 3.27

Indurator Flue Gas Heat Capacity - Basis Typical Composition

100 scfm 359 scf/lbmole

Gas Composition lb/hr f wt % Cp Gas Cp Flue

28 mw CO 0 v % 0

44 mw CO2 15 v % 184 22.0% 0.24 0.0528

18 mw H2O 10 v % 50 6.0% 0.46 0.0276

28 mw N2 60 v % 468 56.0% 0.27 0.1512

32 mw O2 15 v % 134 16.0% 0.23 0.0368

Cp Flue Gas 100 v % 836 100.0% 0.2684

Reference: OAQPS Control Cost Manual 5th Ed Feb 1996 - Chapter 3 Thermal & Catalytic Incinerators

(EPA 453/B-96-001)

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