### From: Aagenes, Jason D. To: "Fenske, Mary Jean" Cc: Skolasinski, Dave Z. Subject: United Taconite BART Analysis Spreadsheet Date: Wednesday, January 31, 2007 11:46:51 AM Attachments: United Taconite Control Costs (2007-01-25).xls



# Mary Jean, Please find attached the updated BART Analysis spreadsheet that Barr prepared for United Taconite. Please note, some of the values may be slightly different than the hard copy which you received previously.Barr noticed some minor items that needed correction.These items were described by Barr as follows,
“In addition to removing the double counted 15% scale up factor, we found a couple of additional small items that we felt were necessary to correct.We noticed we had forgotten to update the catalyst replacement costs for the SCRs.The original basis was from the EPA manual, but we later obtained a bid from a vendor, that we thought was a better approach. In addition, for some equipment we had forgotten to include the correct 6.5% MN sales tax.The overall impact of these changes is very minor (less than 5% on the average), and would not change the conclusions of the report. The attached calculations represent a more accurate result. ”
Please forward this information as appropriate and contact me if you have any questions or need additional information.
Regards, 

# Jason Aagenes Section Manager - Environmental Affairs Cleveland-Cliffs United Taconite LLC P.O. Box180 Eveleth
,MN55734 Office (218) 744-7803 Mobile(218) 290 -5936 Fax (218) 744-7647 

# jdaagenes@cleveland-cliffs.com

### C:\Users\jwiseman\AppData\Local\Microsoft\Windows\Temporary Internet Files\Content.Outlook\BY708G8J\United Taconite Control Costs (2007-01-25).xls Cost Summary 5/4/2012 Page 1 of 1 

# Cleveland Cliffs Incorporated: United 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 Incremental Control Cost $/ton Selective Catalytic Reduction (SCR) + Reheat Line 1 Pellet Induration 80% 399.7 1751.5 $44,591,384 $22,183,231 $12,665 NA Line 2 Pellet Induration 80% 35.0 1598.3 $70,838,846 $33,856,894 $21,183 NA Line 2 Pellet Induration NG 80% 188.7 7975.8 $72,298,312 $36,202,334 $4,539 NA



## 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 Incremental Control Cost $/ton Wet Walled Electrostatic Precipitator (WWESP) Line 1 Pellet Induration 80% 2.8 11.1 $29,805,809 $7,441,650 $671,145 NA Line 2 Pellet Induration 80% 549.9 2199.7 $41,621,612 $17,974,280 $8,171 $23,042 Wet Scrubber (Additional) Line 1 Pellet Induration 60% 5.5 8.3 $19,419,261 $3,035,033 $364,963 NA Line 2 Pellet Induration 60% 1099.9 1649.8 $26,036,114 $5,302,902 $3,214 NA

### C:\Users\jwiseman\AppData\Local\Microsoft\Windows\Temporary Internet Files\Content.Outlook\BY708G8J\United Taconite Control Costs (2007-01-25).xls Utility Chem$ Data 5/4/2012 Page 1 of 3 

# Cleveland Cliffs Incorporated: United Taconite BART Report - <Appendix A> Emission Control Cost Analysis <Table 2>: - Summary of Utility, Chemical and Supply Costs
Operating Unit: Line 1 Pellet Induration Study Year 2006 Emission Unit Number EU 040 Stack/Vent Number SV 046 

### Operating Unit: Line 2 Pellet Induration Emission Unit Number EU 042 Stack/Vent Number SV 048 & 049

Line 1 furnace mmbtu 190 Line 2 furnace mmbtu 400 

### Reference Item Unit Cost Units Cost Year Data Source Notes Operating Labor 45.31 $/hr 2006 Site Specific - United Taconite. Maintenance Labor 47.22 $/hr 2006 Site Specific - United Taconite. Construction Labor Rate. Electricity 0.04 $/kwh 2006 Site Specific - United Taconite. Purchased Cost. Natural Gas 12.81 $/mscf 2006 Site Specific - United Taconite. $12.02/MMBtu @ 1066 Btu/scf. Water 2.07 $/mgal 2006 Site Specific - United Taconite. Purchased Cost.
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 - $0.30 Avg of 22.5 and 7 yrs and 3% inflation.
Compressed Air 0.32 $/mscf 0.25 1998 EPA Air Pollution Control Cost Manual 6th Ed 2002, Section 6 Chapter 1 . Example problem; Dried & Filtered, Ch 1.6 '98 cost adjusted for 3% inflation. Wastewater Disposal Neutralization 3.13 $/mgal 2006 Site Specific - United Taconite. Purchased Cost.
Chemicals & Supplies Lime 88.98 $/ton 88.98 2006

Ammonia (29% aqua.) 0.12 $/lb 0.101 2000 EPA Air Pollution Control Cost Manual 6th Ed 2002, Section 5 Chapter 2, page 2-50. Annual costs for a retrofit SCR system example problem. '00 costs adjusted for 3% inflation. Caustic 484.56 $/ton 280 2003 United Taconite 2006 cost SCR Catalyst 141.00 $/ft3 

### Cormetech, Inc. 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 default.

Operating Information Annual Op. Hrs EU040 6599 Hours BART spreadsheet. Maximum hours of operation 2004-2005 with a 10% safety factor. Annual Op. Hrs EU042 8688 Hours BART spreadsheet. Maximum hours of operation 2004-2005 with a 10% safety factor. Utilization Rate 93% Equipment Life 20 yrs

Standardized Flow Rate SV 046 308,345 scfm @ 32o F Calculated.

SV 048 & 049 615,086 scfm @ 32o F Calculated.

### C:\Users\jwiseman\AppData\Local\Microsoft\Windows\Temporary Internet Files\Content.Outlook\BY708G8J\United Taconite Control Costs (2007-01-25).xls Utility Chem$ Data 5/4/2012 Page 2 of 3 

### Reference Item Unit Cost Units Cost Year Data Source Notes

Temperature SV 046 129 Deg F BART spreadsheet.

SV 048 & 049 121 Deg F BART spreadsheet. Weighted average.

Moisture Content

SV 046 13.8% 2005 Y:\23\69\948 United Taconite Post EERP Testing\Data\Waste Gas Stack. Average from test results in : Line 1 WG pm 5-2-05.

SV 048 & 049 13.8% 2005 Y:\23\69\872 United Tac\Data. Weighted average from test results in: SV049 2BPM and SV048 2APM. Y:\23\69\872 United Tac\Data\SV048 2APM

Actual Flow Rate SV 046 369,137 acfm BART spreadsheet.

SV 048 & 049 726,000 acfm BART spreadsheet.

Standardized Flow Rate SV 046 330,907 scfm @ 68o F Calculated.

SV 048 & 049 660,092 scfm @ 68o F Calculated.

Dry Std Flow Rate

### C:\Users\jwiseman\AppData\Local\Microsoft\Windows\Temporary Internet Files\Content.Outlook\BY708G8J\United Taconite Control Costs (2007-01-25).xls Utility Chem$ Data 5/4/2012 Page 3 of 3 

### Reference Item Unit Cost Units Cost Year Data Source Notes SV 046 285,110 dscfm @ 68o F Calculated.

SV 048 & 049 568,896 dscfm @ 68o F Calculated.

Max Emis Actual Emissions lb/hr ton/year Pollutant Lb/Hr Ton/year ('04&'05 Max) ppmv ppmv lb/mmbtu Nitrous Oxides (NOx) SV 046 651.3 2,151.2 319 240.2 3.428070175 2005 plus 10%

SV 048 & 049 375.2 1,633.3 92 91.4 8.279997057 2004 plus 10%

SV 048 & 049 with NG only 2021.0 8,164.5 495 457.0 Sulfur Dioxides (SO2) SV 046 4.2 13.9 1 1.1 2004 plus 10%

SV 048 & 049 632.2 2,749.7 111 110.5 2004 plus 10%C:\Users\jwiseman\AppData\Local\Microsoft\Windows\Temporary Internet Files\Content.Outlook\BY708G8J\United Taconite Control Costs (2007-01-25).xls EU040 WWESP 5/4/2012 Page 1 of 3 

### Cleveland Cliffs Incorporated: United Taconite BART Report - <Appendix A> Emission Control Cost Analysis <Table 3>: SO2

### Control - Wet Walled Electrostatic Precipitator

Operating Unit: Line 1 Pellet Induration

Emission Unit Number EU 040 Stack/Vent Number SV 046 Standardized Flow Rate 308,345 scfm @ 32o F Expected Utilization Rate 93% Temperature 129 Deg F Expected Annual Hours of Operation 6,599 Hours Moisture Content 13.8% Annual Interest Rate 7.0% Actual Flow Rate 369,137 acfm Expected Equipment Life 20 yrs Standardized Flow Rate 330,907 scfm @ 68o F Dry Std Flow Rate 285,110 dscfm @ 68o F

CONTROL EQUIPMENT COSTS Capital Costs Direct Capital Costs Purchased Equipment (A) 5,420,940 Purchased Equipment Total (B) 22% of control device cost (A) 6,586,442

Installation - Standard Costs 67% of purchased equip cost (B) 4,412,916 Installation - Site Specific Costs 6,200,000 Installation Total 4,412,916 Total Direct Capital Cost, DC 10,999,359 Total Indirect Capital Costs, IC 57%of purchased equip cost (B) 3,754,272 Total Capital Investment (TCI) = DC + IC 29,805,809
Operating Costs 364963.028 Total Annual Direct Operating Costs Labor, supervision, materials, replacement parts, utilities, etc. 3,935,246 Total Annual Indirect Operating Costs Sum indirect oper costs + capital recovery cost 3,506,404 Total Annual Cost (Annualized Capital Cost + Operating Cost) 7,441,650

Actual Emission Control Cost Calculation Emissions Max Emis Annual Cont Eff Cont Emis Reduction Cont Cost Pollutant Lb/Hr T/Yr % T/yr T/yr $/Ton Rem Nitrous Oxides (NOx) 651.3 2,151.2 0% 2151.2

- NA Sulfur Dioxide (SO2) 4.2 13.9 80% 2.8 11.1 671,145

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.C:\Users\jwiseman\AppData\Local\Microsoft\Windows\Temporary Internet Files\Content.Outlook\BY708G8J\United Taconite Control Costs (2007-01-25).xls EU040 WWESP 5/4/2012 Page 2 of 3 

### Cleveland Cliffs Incorporated: United 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 5,420,940 Instrumentation 10% of control device cost (A) 542,094 MN Sales Taxes 6.5% of control device cost (A) 352,361 Freight 5% of control device cost (A) 271,047 Purchased Equipment Total (B) 22% 6,586,442

Installation

Foundations & supports 4% of purchased equip cost (B) 263,458 Handling & erection 50% of purchased equip cost (B) 3,293,221 Electrical 8% of purchased equip cost (B) 526,915 Piping 1% of purchased equip cost (B) 65,864 Insulation 2% of purchased equip cost (B) 131,729 Painting 2% of purchased equip cost (B) 131,729 Installation Subtotal Standard Expenses 67% 4,412,916
Total Direct Capital Cost, DC 10,999,359
Indirect Capital Costs

Engineering, supervision 20%of purchased equip cost (B) 1,317,288 Construction & field expenses 20%of purchased equip cost (B) 1,317,288 Contractor fees 10%of purchased equip cost (B) 658,644 Start-up 1%of purchased equip cost (B) 65,864 Performance test 1%of purchased equip cost (B) 65,864 Model Studies 2%of purchased equip cost (B) 131,729 Contingencies 3%of purchased equip cost (B) 197,593 Total Indirect Capital Costs, IC 57%of purchased equip cost (B) 3,754,272
Total Capital Investment (TCI) = DC + IC 14,753,631

Retrofit multiplier3 60% of TCI 8,852,178

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 29,805,809

OPERATING COSTS

Direct Annual Operating Costs, DC

Operating Labor

Operator 45.31 $/Hr, 2.0 hr/8 hr shift, Annual Operating Hours 74,749 Supervisor 15% 15% of Operator Costs 11,212 Maintenance

Maintenance Labor 47.22 $/Hr, 15.0 hr/wk, Annual Operating Hours 31,165 Maintenance Materials 1.00 % of Maintenance Labor 54,209 Utilities, Supplies, Replacements & Waste Management

Electricity 0.04 $/kwh, 872 kW-hr, annual operating hours, 93% utilization 214,127 Water 2.07 $/mgal, 1,846 gpm, annual operating hours, 93% utilization 1,406,804 WW Treat Neutralization 3.13 $/mgal, 1,846 gpm, annual operating hours, 93% utilization 2,127,197 Caustic 484.56 $/ton, 11 lb/hr, 6598.9 hr/yr, 93% utilization 15,782 Total Annual Direct Operating Costs 3,935,246
Indirect Operating Costs

Overhead 60% of total labor and material costs 102,802 Administration (2% total capital costs) 2% of total capital costs (TCI) 295,073 Property tax (1% total capital costs) 1% of total capital costs (TCI) 147,536 Insurance (1% total capital costs) 1% of total capital costs (TCI) 147,536 Capital Recovery 0.0944 for a 20- year equipment life and a 7% interest rate 2,813,458 Total Annual Indirect Operating Costs Sum indirect oper costs + capital recovery cost 3,506,404

Total Annual Cost (Annualized Capital Cost + Operating Cost) 7,441,650
See summary page for notes and assumptionsC:\Users\jwiseman\AppData\Local\Microsoft\Windows\Temporary Internet Files\Content.Outlook\BY708G8J\United Taconite Control Costs (2007-01-25).xls EU040 WWESP 5/4/2012 Page 3 of 3 

### Cleveland Cliffs Incorporated: United 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 369,137 10 668.1 EPA Cont Cost Manual 6th ed - Sec 6 Ch 3 Eq 3.46 Fluid Head (ft) Pump Eff. Pump Power 60 60% 34.8 EPA Cont Cost Manual 6th ed - Sec 6 Ch 3 Eq 3.47
Plate Area ESP Power 87,305 169.4 EPA Cont Cost Manual 6th ed - Sec 6 Ch 3 Eq 3.48

Total 872.3

Reagent Use & Other Operating Costs
gpm Water 5.00 gal/min-kacfm 1845.69 EPA Cont Cost Manual 6th ed - Sec 6 Ch 3.4.1.6

lb/hr Reagent Use 2.50 lb NaOH/lb SO2 10.61 lb/hr caustic

Operating Cost Calculations Annual hours of operation: 6,599 Utilization Rate: 93.0%

Unit Unit of Use Unit of Annual Annual Comments Item Cost $ Measure Rate Measure Use* Cost Operating Labor Op Labor 45.31 $/Hr 2.0 hr/8 hr shift 1,650 74,749 $/Hr, 2.0 hr/8 hr shift, Annual Operating Hours Supervisor 15% of Op. NA 11,212 15% of Operator Costs Maintenance Maint Labor 47.22 $/Hr 15.0 hr/wk 660 31,165 $/Hr, 15.0 hr/wk, Annual Operating Hours Maint Mtls 1 % of Purchase Cost NA 54,209 EPA Cont Cost Manual 6th ed - Sec 6 Ch 3.4.1.1 Utilities, Supplies, Replacements & Waste Management Electricity 0.040 $/kwh 872.3 kW-hr 5,353,163 214,127 $/kwh, 872 kW-hr, annual operating hours, 93% utilization Water 2.07 $/mgal 1,845.7 gpm 679,616 1,406,804 $/mgal, 1,846 gpm, annual operating hours, 93% utilization WW Treat Neutralizatio 3.13 $/mgal 1,845.7 gpm 679,616 2,127,197 $/mgal, 1,846 gpm, annual operating hours, 93% utilization Caustic 484.56 $/ton 10.6 lb/hr 33 15,782 $/ton, 11 lb/hr, 6598.9 hr/yr, 93% utilization

*annual use rate is in same units of measurement as the unit cost factor
See summary page for notes and assumptionsC:\Users\jwiseman\AppData\Local\Microsoft\Windows\Temporary Internet Files\Content.Outlook\BY708G8J\United Taconite Control Costs (2007-01-25).xls EU042 WWESP 5/4/2012 Page 1 of 3 

### Cleveland Cliffs Incorporated: United Taconite BART Report - <Appendix A> Emission Control Cost Analysis <Table 4>: SO2

### Control - Wet Walled Electrostatic Precipitator

Operating Unit: Line 2 Pellet Induration

Emission Unit Number EU 042 Stack/Vent Number SV 048 & 049 Standardized Flow Rate 615,086 scfm @ 32o F Expected Utilization Rate 93% Temperature 121 Deg F Expected Annual Hours of Operation 8,688 Hours Moisture Content 13.8% Annual Interest Rate 7.0% Actual Flow Rate 726,000 acfm Expected Equipment Life 20 yrs Standardized Flow Rate 660,092 scfm @ 68o F Dry Std Flow Rate 568,896 dscfm @ 68o F

CONTROL EQUIPMENT COSTS Capital Costs Direct Capital Costs Purchased Equipment (A) 8,134,372 Purchased Equipment Total (B) 22% of control device cost (A) 9,883,262

Installation - Standard Costs 67% of purchased equip cost (B) 6,621,786 Installation - Site Specific Costs 6,200,000 Installation Total 6,621,786 Total Direct Capital Cost, DC 16,505,048 Total Indirect Capital Costs, IC 57%of purchased equip cost (B) 5,633,459 Total Capital Investment (TCI) = DC + IC 41,621,612
Operating Costs 364963.028 Total Annual Direct Operating Costs Labor, supervision, materials, replacement parts, utilities, etc. 13,024,545 Total Annual Indirect Operating Costs Sum indirect oper costs + capital recovery cost 4,949,735 Total Annual Cost (Annualized Capital Cost + Operating Cost) 17,974,280

Actual Emission Control Cost Calculation Emissions Max Emis Annual Cont Eff Cont Emis Reduction Cont Cost Pollutant Lb/Hr T/Yr % T/yr T/yr $/Ton Rem Nitrous Oxides (NOx) 375.2 1,633.3 0% 1633.3

- NA Sulfur Dioxide (SO2) 632.2 2,749.7 80% 549.9 2,199.7 8,171

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.C:\Users\jwiseman\AppData\Local\Microsoft\Windows\Temporary Internet Files\Content.Outlook\BY708G8J\United Taconite Control Costs (2007-01-25).xls EU042 WWESP 5/4/2012 Page 2 of 3 

### Cleveland Cliffs Incorporated: United 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 8,134,372 Instrumentation 10% of control device cost (A) 813,437 MN Sales Taxes 6.5% of control device cost (A) 528,734 Freight 5% of control device cost (A) 406,719 Purchased Equipment Total (B) 22% 9,883,262

Installation

Foundations & supports 4% of purchased equip cost (B) 395,330 Handling & erection 50% of purchased equip cost (B) 4,941,631 Electrical 8% of purchased equip cost (B) 790,661 Piping 1% of purchased equip cost (B) 98,833 Insulation 2% of purchased equip cost (B) 197,665 Painting 2% of purchased equip cost (B) 197,665 Installation Subtotal Standard Expenses 67% 6,621,786
Total Direct Capital Cost, DC 16,505,048
Indirect Capital Costs

Engineering, supervision 20%of purchased equip cost (B) 1,976,652 Construction & field expenses 20%of purchased equip cost (B) 1,976,652 Contractor fees 10%of purchased equip cost (B) 988,326 Start-up 1%of purchased equip cost (B) 98,833 Performance test 1%of purchased equip cost (B) 98,833 Model Studies 2%of purchased equip cost (B) 197,665 Contingencies 3%of purchased equip cost (B) 296,498 Total Indirect Capital Costs, IC 57%of purchased equip cost (B) 5,633,459
Total Capital Investment (TCI) = DC + IC 22,138,507

Retrofit multiplier3 60% of TCI 13,283,104

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 41,621,612

OPERATING COSTS

Direct Annual Operating Costs, DC

Operating Labor

Operator 45.31 $/Hr, 2.0 hr/8 hr shift, Annual Operating Hours 98,411 Supervisor 15% 15% of Operator Costs 14,762 Maintenance

Maintenance Labor 47.22 $/Hr, 15.0 hr/wk, Annual Operating Hours 31,165 Maintenance Materials 1.00 % of Maintenance Labor 81,344 Utilities, Supplies, Replacements & Waste Management

Electricity 0.04 $/kwh, 1,716 kW-hr, annual operating hours, 93% utilization 554,444 Water 2.07 $/mgal, 3,630 gpm, annual operating hours, 93% utilization 3,642,680 WW Treat Neutralization 3.13 $/mgal, 3,630 gpm, annual operating hours, 93% utilization 5,508,013 Caustic 484.56 $/ton, 1,580 lb/hr, 8687.8 hr/yr, 93% utilization 3,093,727 Total Annual Direct Operating Costs 13,024,545
Indirect Operating Costs

Overhead 60% of total labor and material costs 135,409 Administration (2% total capital costs) 2% of total capital costs (TCI) 442,770 Property tax (1% total capital costs) 1% of total capital costs (TCI) 221,385 Insurance (1% total capital costs) 1% of total capital costs (TCI) 221,385 Capital Recovery 0.0944 for a 20- year equipment life and a 7% interest rate 3,928,786 Total Annual Indirect Operating Costs Sum indirect oper costs + capital recovery cost 4,949,735

Total Annual Cost (Annualized Capital Cost + Operating Cost) 17,974,280
See summary page for notes and assumptionsC:\Users\jwiseman\AppData\Local\Microsoft\Windows\Temporary Internet Files\Content.Outlook\BY708G8J\United Taconite Control Costs (2007-01-25).xls EU042 WWESP 5/4/2012 Page 3 of 3 

### Cleveland Cliffs Incorporated: United 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 726,000 10 1,314.1 EPA Cont Cost Manual 6th ed - Sec 6 Ch 3 Eq 3.46 Fluid Head (ft) Pump Eff. Pump Power 60 60% 68.4 EPA Cont Cost Manual 6th ed - Sec 6 Ch 3 Eq 3.47
Plate Area ESP Power 171,708 333.1 EPA Cont Cost Manual 6th ed - Sec 6 Ch 3 Eq 3.48

Total 1,715.6

Reagent Use & Other Operating Costs
gpm Water 5.00 gal/min-kacfm 3630.00 EPA Cont Cost Manual 6th ed - Sec 6 Ch 3.4.1.6

lb/hr Reagent Use 2.50 lb NaOH/lb SO2 1580.42 lb/hr caustic

Operating Cost Calculations Annual hours of operation: 8,688 Utilization Rate: 93.0%

Unit Unit of Use Unit of Annual Annual Comments Item Cost $ Measure Rate Measure Use* Cost Operating Labor Op Labor 45.31 $/Hr 2.0 hr/8 hr shift 2,172 98,411 $/Hr, 2.0 hr/8 hr shift, Annual Operating Hours Supervisor 15% of Op. NA 14,762 15% of Operator Costs Maintenance Maint Labor 47.22 $/Hr 15.0 hr/wk 660 31,165 $/Hr, 15.0 hr/wk, Annual Operating Hours Maint Mtls 1 % of Purchase Cost NA 81,344 EPA Cont Cost Manual 6th ed - Sec 6 Ch 3.4.1.1 Utilities, Supplies, Replacements & Waste Management Electricity 0.040 $/kwh 1715.6 kW-hr 13,861,102 554,444 $/kwh, 1,716 kW-hr, annual operating hours, 93% utilization Water 2.07 $/mgal 3,630.0 gpm 1,759,749 3,642,680 $/mgal, 3,630 gpm, annual operating hours, 93% utilization WW Treat Neutralizatio 3.13 $/mgal 3,630.0 gpm 1,759,749 5,508,013 $/mgal, 3,630 gpm, annual operating hours, 93% utilization Caustic 484.56 $/ton 1,580.4 lb/hr 6,385 3,093,727 $/ton, 1,580 lb/hr, 8687.8 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

## C:\Users\jwiseman\AppData\Local\Microsoft\Windows\Temporary Internet Files\Content.Outlook\BY708G8J\United Taconite Control Costs (2007-01-25).xls EU040 Wet Scrubber 5/4/2012 Page 1 of 5 

# Cleveland Cliffs Incorporated: United Taconite BART Report - <Appendix A> Emission Control Cost Analysis <Table 5>: SOx

# Control - Wet Scrubber

Operating Unit: Line 1 Pellet Induration

Emission Unit Number EU 040 Stack/Vent Number SV 046 Standardized Flow Rate 308,345 scfm @ 32o F Expected Utilization Rate 93% Temperature 129 Deg F Expected Annual Hours of Operation 6,599 Hours Moisture Content 13.8% Annual Interest Rate 7.0% Actual Flow Rate 369,137 acfm Expected Equipment Life 20yrs Standardized Flow Rate 330,907scfm @ 68o F Dry Std Flow Rate 285,110 dscfm @ 68o F

CONTROL EQUIPMENT COSTS Capital Costs Direct Capital Costs (1) Purchased Equipment (A) 3,400,016 Purchased Equipment Total (B) 22% of control device cost (A) 4,131,019

Installation - Standard Costs 85% of purchased equip cost (B) 3,511,366 Installation - Site Specific Costs 6,200,000 Installation Total 3,511,366 Total Direct Capital Cost, DC 7,642,385 Total Indirect Capital Costs, IC 15%of purchased equip cost (B) 619,653 Total Capital Investment (TCI) = DC + IC 19,419,261
Operating Costs 364,963 Total Annual Direct Operating Costs Labor, supervision, materials, replacement parts, utilities, etc. 835,246 Total Annual Indirect Operating Costs Sum indirect oper costs + capital recovery cost 2,199,787 Total Annual Cost (Annualized Capital Cost + Operating Cost) 3,035,033

Actual 

## Emission Control Cost Calculation Emissions Max Emis Annual Cont Eff Cont Emis Reduction Cont Cost Pollutant Lb/Hr T/Yr % T/yr T/yr $/Ton Rem Nitrous Oxides (NOx) 651.3 2,151.2 0% 2151.2

- NA Sulfur Dioxide (SO2

## ) 4.2 13.9 60% 5.5 8.3 364,963

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.

## C:\Users\jwiseman\AppData\Local\Microsoft\Windows\Temporary Internet Files\Content.Outlook\BY708G8J\United Taconite Control Costs (2007-01-25).xls EU040 Wet Scrubber 5/4/2012 Page 2 of 5 

# Cleveland Cliffs Incorporated: United Taconite BART Report - <Appendix A> Emission Control Cost Analysis <Table 5>: SOx Control - Wet Scrubber

CAPITAL COSTS Direct Capital Costs

Purchased Equipment (A) (1)

Purchased Equipment Costs (A) - Absorber + packing + auxiliary equipment, EC 3,400,016 Instrumentation 10% of control device cost (A) 340,002 MN Sales Taxes 7% of control device cost (A) 221,001 Freight 5% of control device cost (A) 170,001 Purchased Equipment Total (B) 22% 4,131,019

Installation

Foundations & supports 12% of purchased equip cost (B) 495,722 Handling & erection 40% of purchased equip cost (B) 1,652,408 Electrical 1% of purchased equip cost (B) 41,310 Piping 30% of purchased equip cost (B) 1,239,306 Insulation 1% of purchased equip cost (B) 41,310 Painting 1% of purchased equip cost (B) 41,310 Installation Subtotal Standard Expenses 85% 3,511,366
Total Direct Capital Cost, DC 7,642,385
Indirect Capital Costs Engineering, supervision 5%of purchased equip cost (B) 206,551 Construction & field expenses 0%of purchased equip cost (B) 0 Contractor fees 5%of purchased equip cost (B) 206,551 Start-up 1%of purchased equip cost (B) 41,310 Performance test 1%of purchased equip cost (B) 41,310 Model Studies NAof purchased equip cost (B) NA Contingencies 3%of purchased equip cost (B) 123,931 Total Indirect Capital Costs, IC 15%of purchased equip cost (B) 619,653
Total Capital Investment (TCI) = DC + IC 8,262,038 Retrofit multiplier5 

## 60% of TCI 4,957,223

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 19,419,261

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# Cleveland Cliffs Incorporated: United Taconite BART Report - <Appendix A> Emission Control Cost Analysis <Table 5>: SOx Control - Wet Scrubber

OPERATING COSTS Direct Annual Operating Costs, DC

Operating Labor

Operator 37.00 $/Hr, 0.5 hr/8 hr shift, Annual Operating Hours 18,687 Supervisor 15% 15% of Operator Costs 2,803 Maintenance

Maintenance Labor 40.00 $/Hr, 0.5 hr/8 hr shift, Annual Operating Hours 19,475 Maintenance Materials 100% of maintenance labor costs 19,475 Utilities, Supplies, Replacements & Waste Management

Electricity 0.04$/kwh, 759 kW-hr, annual operating hours, 93% utilization 186,351 Water 2.07$/kgal, 346 gpm, annual operating hours, 93% utilization 264,005 WW Treat Neutralization 3.13$/kgal, 281 gpm, annual operating hours, 93% utilization 323,334 Lime 88.98 $/ton, 4 lb/hr, annual operating hours, 93% utilization 1,116 Total Annual Direct Operating Costs 835,246
Indirect Operating Costs Overhead 60% of total labor and material costs 36,264 Administration (2% total capital costs) 2% of total capital costs (TCI) 165,241 Property tax (1% total capital costs) 1% of total capital costs (TCI) 82,620 Insurance (1% total capital costs) 1% of total capital costs (TCI) 82,620 Capital Recovery 0.0944for a 20- year equipment life and a 7% interest rate 1,833,041 Total Annual Indirect Operating Costs Sum indirect oper costs + capital recovery cost 2,199,787

Total Annual Cost (Annualized Capital Cost + Operating Cost) 3,035,033

See Summary page for notes and assumptions

## C:\Users\jwiseman\AppData\Local\Microsoft\Windows\Temporary Internet Files\Content.Outlook\BY708G8J\United Taconite Control Costs (2007-01-25).xls EU040 Wet Scrubber 5/4/2012 Page 4 of 5 

# Cleveland Cliffs Incorporated: United Taconite BART Report - <Appendix A> Emission Control Cost Analysis <Table 5>: SOx Control - Wet Scrubber

Capital Recovery Factors Primary Installation Interest Rate 7.00% Equipment Life 20years CRF 0.0944
Replacement Catalyst: Equipment Life 20years CRF 0.0000 Rep part cost per unit 0 $/ft3 

## Amount Required 0ft3 

## Packing Cost 0 Cost adjusted for freight & sales tax Installation Labor 0Assume Labor = 15% of catalyst cost (basis labor for baghouse replacement) Total Installed Cost 0Zero 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 0Zero out if no replacement parts needed Annualized Cost 0

Electrical Use Flow acfm Δ P in H2O 

## Efficiency Hp kW Blower, Scrubber 369,137 8.55 0.7

- 527.5 EPA Cost Cont Manual 6th ed Section 5.2 Chapter 1 Eq 1.48 Flow Liquid SPGR Δ P ft H2O 

## Efficiency Hp kW Circ Pump 14,027 gpm 1 60 0.7

- 226.0 EPA Cost Cont Manual 6th ed Section 5.2 Chapter 1 Eq 1.49
H2O WW Disch 

## 346 gpm 1 60 0.7

- 5.6 EPA Cost Cont Manual 6th ed Section 5.2 Chapter 1 Eq 1.49 Other Total 759.1
Reagent Use & Other Operating Costs Caustic Use 4.25 lb/hr SO2 2.50 lb NaOH/lb SO2 

## 10.61 lb/hr Caustic Lime Use 4.25 lb/hr SO2 0.96 lb Lime/lb SO2 

## 4.09 lb/hr lime, lime addition at 1.1 times the stoichiometric ratio Liquid/Gas ratio2 

## 38.0 * L/G = Gal/1,000 acf Circulating Water Rate 14,027 gpm Water Makeup Rate/WW Disch3

## = 2.0% of circulating water rate + evap. loss = 346 gpm Evaporation Loss4

## = 65.82 gpm

## C:\Users\jwiseman\AppData\Local\Microsoft\Windows\Temporary Internet Files\Content.Outlook\BY708G8J\United Taconite Control Costs (2007-01-25).xls EU040 Wet Scrubber 5/4/2012 Page 5 of 5 

# Cleveland Cliffs Incorporated: United Taconite BART Report - <Appendix A> Emission Control Cost Analysis <Table 5>: SOx Control - Wet Scrubber

Operating Cost Calculations Annual hours of operation: 6,599 Utilization Rate: 93%

Unit Unit of Use Unit of Annual Annual Comments Item Cost $ Measure Rate Measure Use* Cost Operating Labor Op Labor 45.31 $/Hr 0.5 hr/8 hr shift 412 18,687$/Hr, 0.5 hr/8 hr shift, Annual Operating Hours Supervisor 15% of Op. NA 2,803 15% of Operator Costs Maintenance Maint Labor 47.22 $/Hr 0.5 hr/8 hr shift 412 19,475 $/Hr, 0.5 hr/8 hr shift, Annual Operating Hours Maint Mtls 100 % of Maintenance Labor NA 19,475 100% of Maintenance Labor Utilities, Supplies, Replacements & Waste Management Electricity 0.040 $/kwh 759.1 kW-hr 4,658,783 186,351 $/kwh, 759 kW-hr, annual operating hours, 93% utilization Water 2.07$/kgal 346.4 gpm 127,538 264,005 $/kgal, 346 gpm, annual operating hours, 93% utilization WW Treat Neutralizatio 3.13$/kgal 280.5 gpm 103,302 323,334$/kgal, 281 gpm, annual operating hours, 93% utilization Lime 89.0 $/ton 4.1 lb/hr 13 1,116 $/ton, 4 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

### C:\Users\jwiseman\AppData\Local\Microsoft\Windows\Temporary Internet Files\Content.Outlook\BY708G8J\United Taconite Control Costs (2007-01-25).xls EU042 Wet Scrubber 5/4/2012 Page 1 of 5 

# Cleveland Cliffs Incorporated: United Taconite BART Report - <Appendix A> Emission Control Cost Analysis <Table 6>: SOx

# Control - Wet Scrubber

Operating Unit: Line 2 Pellet Induration

Emission Unit Number EU 042 Stack/Vent Number SV 048 & 049 Standardized Flow Rate 615,086 scfm @ 32o F Expected Utilization Rate 93% Temperature 121 Deg F Expected Annual Hours of Operation 8,688 Hours Moisture Content 13.8% Annual Interest Rate 7.0% Actual Flow Rate 726,000 acfm Expected Equipment Life 20yrs Standardized Flow Rate 660,092 scfm @ 68o F Dry Std Flow Rate 568,896 dscfm @ 68o F

CONTROL EQUIPMENT COSTS Capital Costs Direct Capital Costs (1) Purchased Equipment (A) 5,101,881 Purchased Equipment Total (B) 22% of control device cost (A) 6,198,786

Installation - Standard Costs 85% of purchased equip cost (B) 5,268,968 Installation - Site Specific Costs 6,200,000 Installation Total 5,268,968 Total Direct Capital Cost, DC 11,467,753 Total Indirect Capital Costs, IC 15%of purchased equip cost (B) 929,818 Total Capital Investment (TCI) = DC + IC 26,036,114
Operating Costs 364963.028 Total Annual Direct Operating Costs Labor, supervision, materials, replacement parts, utilities, etc. 2,301,630 Total Annual Indirect Operating Costs Sum indirect oper costs + capital recovery cost 3,001,272 Total Annual Cost (Annualized Capital Cost + Operating Cost) 5,302,902

Actual 

## Emission Control Cost Calculation Emissions Max Emis Annual Cont Eff Cont Emis Reduction Cont Cost Pollutant Lb/Hr T/Yr % T/yr T/yr $/Ton Rem Nitrous Oxides (NOx) 375.2 1,633.3 0% 1633.3

- NA Sulfur Dioxide (SO2

### ) 632.2 2,749.7 60% 1099.9 1,649.8 3,214

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.

### C:\Users\jwiseman\AppData\Local\Microsoft\Windows\Temporary Internet Files\Content.Outlook\BY708G8J\United Taconite Control Costs (2007-01-25).xls EU042 Wet Scrubber 5/4/2012 Page 2 of 5 

# Cleveland Cliffs Incorporated: United 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 5,101,881 Instrumentation 10% of control device cost (A) 510,188 MN Sales Taxes 7% of control device cost (A) 331,622 Freight 5% of control device cost (A) 255,094 Purchased Equipment Total (B) 22% 6,198,786

Installation

Foundations & supports 12% of purchased equip cost (B) 743,854 Handling & erection 40% of purchased equip cost (B) 2,479,514 Electrical 1% of purchased equip cost (B) 61,988 Piping 30% of purchased equip cost (B) 1,859,636 Insulation 1% of purchased equip cost (B) 61,988 Painting 1% of purchased equip cost (B) 61,988 Installation Subtotal Standard Expenses 85% 5,268,968
Total Direct Capital Cost, DC 11,467,753
Indirect Capital Costs Engineering, supervision 5%of purchased equip cost (B) 309,939 Construction & field expenses 0%of purchased equip cost (B) 0 Contractor fees 5%of purchased equip cost (B) 309,939 Start-up 1%of purchased equip cost (B) 61,988 Performance test 1%of purchased equip cost (B) 61,988 Model Studies NAof purchased equip cost (B) NA Contingencies 3%of purchased equip cost (B) 185,964 Total Indirect Capital Costs, IC 15%of purchased equip cost (B) 929,818
Total Capital Investment (TCI) = DC + IC 12,397,571 Retrofit multiplier5 

### 60% of TCI 7,438,543

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 26,036,114

### C:\Users\jwiseman\AppData\Local\Microsoft\Windows\Temporary Internet Files\Content.Outlook\BY708G8J\United Taconite Control Costs (2007-01-25).xls EU042 Wet Scrubber 5/4/2012 Page 3 of 5 

# Cleveland Cliffs Incorporated: United Taconite BART Report - <Appendix A> Emission Control Cost Analysis <Table 6>: SOx Control - Wet Scrubber

OPERATING COSTS Direct Annual Operating Costs, DC

Operating Labor

Operator 37.00 $/Hr, 0.5 hr/8 hr shift, Annual Operating Hours 24,603 Supervisor 15% 15% of Operator Costs 3,690 Maintenance

Maintenance Labor 40.00 $/Hr, 0.5 hr/8 hr shift, Annual Operating Hours 25,640 Maintenance Materials 100% of maintenance labor costs 25,640 Utilities, Supplies, Replacements & Waste Management

Electricity 0.04 $/kwh, 1,493 kW-hr, annual operating hours, 93% utilization 482,525 Water 2.07 $/kgal, 681 gpm, annual operating hours, 93% utilization 683,595 WW Treat Neutralization 3.13 $/kgal, 552 gpm, annual operating hours, 93% utilization 837,218 Lime 88.98 $/ton, 608 lb/hr, annual operating hours, 93% utilization 218,719 Total Annual Direct Operating Costs 2,301,630
Indirect Operating Costs Overhead 60% of total labor and material costs 47,744 Administration (2% total capital costs) 2% of total capital costs (TCI) 247,951 Property tax (1% total capital costs) 1% of total capital costs (TCI) 123,976 Insurance (1% total capital costs) 1% of total capital costs (TCI) 123,976 Capital Recovery 0.0944for a 20- year equipment life and a 7% interest rate 2,457,625 Total Annual Indirect Operating Costs Sum indirect oper costs + capital recovery cost 3,001,272

Total Annual Cost (Annualized Capital Cost + Operating Cost) 5,302,902

See Summary page for notes and assumptions

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# Cleveland Cliffs Incorporated: United 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 20years CRF 0.0944
Replacement Catalyst: Equipment Life 20years CRF 0.0000 Rep part cost per unit 0 $/ft3 

### Amount Required 0ft3 

### Packing Cost 0 Cost adjusted for freight & sales tax Installation Labor 0Assume 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 Δ P in H2O 

### Efficiency Hp kW Blower, Scrubber 726,000 8.55 0.7

- 1,037.5 EPA Cost Cont Manual 6th ed Section 5.2 Chapter 1 Eq 1.48 Flow Liquid SPGR Δ P ft H2O 

### Efficiency Hp kW Circ Pump 27,588 gpm 1 60 0.7

- 444.5 EPA Cost Cont Manual 6th ed Section 5.2 Chapter 1 Eq 1.49
H2O WW Disch 

### 681 gpm 1 60 0.7

- 11.0 EPA Cost Cont Manual 6th ed Section 5.2 Chapter 1 Eq 1.49 Other Total 1493.0
Reagent Use & Other Operating Costs Caustic Use 632.17 lb/hr SO2 2.50 lb NaOH/lb SO2 

### 1580.42 lb/hr Caustic Lime Use 632.17 lb/hr SO2 0.96 lb Lime/lb SO2 

### 608.46 lb/hr lime, lime addition at 1.1 times the stoichiometric ratio Liquid/Gas ratio2 

### 38.0 * L/G = Gal/1,000 acf Circulating Water Rate 27,588 gpm Water Makeup Rate/WW Disch3

### = 2.0% of circulating water rate + evap. loss = 681 gpm Evaporation Loss4

### = 129.46 gpm

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# Cleveland Cliffs Incorporated: United Taconite BART Report - <Appendix A> Emission Control Cost Analysis <Table 6>: SOx Control - Wet Scrubber

Operating Cost Calculations Annual hours of operation: 8,688 Utilization Rate: 93%

Unit Unit of Use Unit of Annual Annual Comments Item Cost $ Measure Rate Measure Use* Cost Operating Labor Op Labor 45.31 $/Hr 0.5 hr/8 hr shift 543 24,603 $/Hr, 0.5 hr/8 hr shift, Annual Operating Hours Supervisor 15% of Op. NA 3,690 15% of Operator Costs Maintenance Maint Labor 47.22 $/Hr 0.5 hr/8 hr shift 543 25,640 $/Hr, 0.5 hr/8 hr shift, Annual Operating Hours Maint Mtls 100 % of Maintenance Labor NA 25,640 100% of Maintenance Labor Utilities, Supplies, Replacements & Waste Management Electricity 0.040 $/kwh 1493.0 kW-hr 12,063,123 482,525 $/kwh, 1,493 kW-hr, annual operating hours, 93% utilization Water 2.07 $/kgal 681.2 gpm 330,239 683,595 $/kgal, 681 gpm, annual operating hours, 93% utilization WW Treat Neutralization 3.13 $/kgal 551.8 gpm 267,482 837,218 $/kgal, 552 gpm, annual operating hours, 93% utilization Lime 89.0 $/ton 608.5 lb/hr 2,458 218,719 $/ton, 608 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 assumptionsC:\Users\jwiseman\AppData\Local\Microsoft\Windows\Temporary Internet Files\Content.Outlook\BY708G8J\United Taconite Control Costs (2007-01-25).xls EU040 SCR EU040 SCR 1 of 3 

## Cleveland Cliffs Incorporated: United Taconite BART Report - <Appendix A> Emission Control Cost Analysis Table 7: -Summary of Utility, Chemical and Supply Costs

Operating Unit: Line 1 Pellet Induration

Emission Unit Number EU 040 Stack/Vent Number SV 046 Desgin Capacity 190 MMBtu/hr Standardized Flow Rate 308,345 scfm @ 32o F Expected Utiliztion Rate 93% Temperature 129 Deg F Expected Annual Hours of Operation 6,599 Hours Moisture Content 13.8% Annual Interest Rate 7.0% Actual Flow Rate 369,137 acfm Expected Equipment Life 20 yrs Standardized Flow Rate 330,907 scfm @ 68o F Dry Std Flow Rate 285,110 dscfm @ 68o F

CONTROL EQUIPMENT COSTS Capital Costs Direct Capital Costs EPRI Correlation Purchased Equipment (A) 15,894,553 Purchased Equipment Total (B) SCR Only 16,927,699 SCR + Reheat 17,670,295

Total Capital Investment (TCI) = DC + IC SCR + Reheat 44,591,384
Operating Costs Total Annual Direct Operating Costs Labor, supervision, materials, replacement parts, utilities, etc. SCR + Reheat 16,649,195 Total Annual Indirect Operating Costs Sum indirect oper costs + capital recovery cost SCR + Reheat 5,534,036 Total Annual Cost (Annualized Capital Cost + Operating Cost) SCR + Reheat 22,183,231



### 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) 2,151.2 130.3 0.69 399.7 1,751.5 12,665

Notes & Assumptions 1 Calculations per EPA Air Pollution Control Cost Manual 6th Ed 2002, Section 4.2 Chapter 2 2 Estimated Equipment Cost per EPA Air Pollution Control Cost Manual 6th Ed 2002, Section 4.2 Chapter 2. 3 CUECost Workbook Version 1.0, USEPA Document Page 2. 4 Catalyst replacement every three years. This requires an additional 2 week outage per 3 year outage cycle, annualized to 4.7 days.C:\Users\jwiseman\AppData\Local\Microsoft\Windows\Temporary Internet Files\Content.Outlook\BY708G8J\United Taconite Control Costs (2007-01-25).xls EU040 SCR EU040 SCR 2 of 3 

## Cleveland Cliffs Incorporated: United Taconite BART Report - <Appendix A> Emission Control Cost Analysis Table 7: -Summary of Utility, Chemical and Supply Costs

CAPITAL COSTS (1) Direct Capital Costs

Purchased Equipment (A) (2)

Purchased Equipment Costs (A) - Absorber + packing + auxillary equipment, EC 15,894,553 Instrumentation 10% of control device cost (A) NA MN Sales Taxes 6.5% of control device cost (A) 1,033,146 Freight 5% of control device cost (A) NA Purchased Equipment Total (A) 16,927,699

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 16% Replacement Power, two weeks 2,643,899
Total Indirect Installation Costs (B) 16% of purchased equip cost (A) 2,643,899

Project Contingeny (C) 15% of (A + B) 2,935,740
Total Plant Cost (D) A + B + C 22,507,337
Allowance for Funds During Construction (E)

Pre Production Costs (G) 2% of (D+E)) 450,147
Inventory Capital Reagent Vol * $/gal 289,894
Total Capital Investment (TCI) = DC + IC D + E + F + G +H + I 23,247,378 Retrofit multiplier3 60% of TCI 13,948,427 Adjusted TCI for Replacement Parts (Catalyst, Filter Bags, etc) for Capital Recovery Cost NA Total Retrofit Capital 37,195,804 

### OPERATING COSTS Direct Annual Operating Costs, DC

Operating Labor

Operator 45.31 $/Hr, 2.0 hr/8 hr shift, 6598.9 hr/yr 74,749 Supervisor 15% 15% of Operator Costs 11,212 Maintenance

Maintenance Total 1.50 % of Total Capital Investment 348,711 Maintenance Materials NA % of Maintenance Labor - Utilities, Supplies, Replacements & Waste Management

Electricity 0.04 $/kwh, 1,222 kW-hr, 6598.9 hr/yr, 93% utilization 299,931 SCR Catalyst 141.00 Catalyst Replacement 160,777 Ammonia (29% aqua.) 0.12 $/lb, 8,542 lb/hr, 6598.9 hr/yr, 93% utilization 6,322,342 Total Annual Direct Operating Costs 7,217,722
Indirect Operating Costs Overhead 60% fixed O&M 62,942 Administration (2% total capital costs) 2% of total capital costs (TCI) 464,948 Property tax (1% total capital costs) 1% of total capital costs (TCI) 232,474 Insurance (1% total capital costs) 1% of total capital costs (TCI) 232,474 Capital Recovery 9.44% for a 20- year equipment life and a 7% interest rate 3,511,021 Total Annual Indirect Operating Costs Sum indirect oper costs + capital recovery cost 4,503,858

Total Annual Cost (Annualized Capital Cost + Operating Cost) 11,721,580

See Summary page for notes and assumptionsC:\Users\jwiseman\AppData\Local\Microsoft\Windows\Temporary Internet Files\Content.Outlook\BY708G8J\United Taconite Control Costs (2007-01-25).xls EU040 SCR EU040 SCR 3 of 3 

## Cleveland Cliffs Incorporated: United Taconite BART Report - <Appendix A> Emission Control Cost Analysis Table 7: -Summary of Utility, Chemical and Supply Costs

Capital Recovery Factors Primary Installation Interest Rate 7.00% Equipment Life 20 years CRF 0.0944
Equivalent Duty 1,859 Plant Cap kW A 190,728 Est power platn eff 35% Unc Nox lb/mmBtu B 3.43 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 190,728 Capital Cost $/kW D $83.34 $15,894,552.62 Total SCR Equipment Uncontrolled Nox t/y 2,151.2 Fixed O&M E $104,904.05 Annual Operating Hrs 8000 Variable O&M F $423,896.63 Uncontrolled Nox lb/mm 3.428 Ann Cap Factor G 0.82 Heat Input mmBtu/ H 6,000

Replacement Catayst Estimate amount of catalyst required Equipment Life 24,000 hours Vol. #1 2708 ft3 Cormetech, Inc. FCW 0.2252 Flow #1 177,000 scfm Cormetech, Inc. Rep part cost per unit $141 Flow #2 330,907 scfm Vol #2 5062.7 ft3 Amount Required 5,063 ft3 Catalyst Cost $713,840 Y catalyst life factor 4 Years Annualized Cost 160,777

Electrical Use Duty 1,859 MMBtu/hr kW NOx Cont Eff 80% (as faction) Power 1,221.8 NOx in 3.43 lb/MMBtu n catalyst layers 4 layers Press drop catalyst 1 in H2O per layer Press drop duct 3 in H2O Total 1221.8
Reagent Use & Other Operating Costs Ammonia Use 56.0 lb/ft3Density 2477 lb/hr Neat 1141.2 gal/hr 29% solution Volume 14 day inventory 383,433 gal $289,894 Inventory Cost 8542 lb/hr

Design Basis Baseline EmBaseline EmiMax Emis. (Model) Control Eff (%) Cont. Emis (lb/MMBtu) T/yr lb/mmbtu lb/hr 80% 0.69 Nitrous Oxide 2,151.2 3.428 651.33

Actual 90,035 dscf/MMBtu Method 19 Factor 9,200 dscf/MMBtu Adjusted Duty 1,859 MMBtu/hr
Operating Cost Calculations Annual hours of operation: 6,599 Utilization Rate: 93%

Unit Unit of Use Unit of Annual Annual Comments Item Cost $ Measure Rate Measure Use* Cost Operating Labor Op Labor 45.31 $/Hr 2.0 hr/8 hr shift 1,650 74,749 $/Hr, 2.0 hr/8 hr shift, 6598.9 hr/yr Supervisor 15% of Op. NA 11,212 15% of Operator Costs Maintenance Maintenance Total 1.5 % of Total Capital Investment 348,711 % of Total Capital Investment Maint Mtls 0 % of Maintenance Labor NA 0 0% of Maintenance Labor Utilities, Supplies, Replacements & Waste Management Electricity 0.040 $/kwh 1221.8 kW-hr 7,498,281 299,931 $/kwh, 1,222 kW-hr, 6598.9 hr/yr, 93% utilization SCR Catalyst 141 $/ft3 $160,777 Catalyst Replacement Ammonia (29% aqua.) 0.12 $/lb 8542 lb/hr 52,424,372 6,322,342 $/lb, 8,542 lb/hr, 6598.9 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 assumptionsC:\Users\jwiseman\AppData\Local\Microsoft\Windows\Temporary Internet Files\Content.Outlook\BY708G8J\United Taconite Control Costs (2007-01-25).xls EU040 Reheat EU040 Reheat 1 of 4 

## Cleveland Cliffs Incorporated: United Taconite BART Report - <Appendix A> Emission Control Cost Analysis <Table 8>: - Summary of Utility, Chemical and Supply Costs

Operating Unit: Line 1 Pellet Induration

Emission Unit Number EU 040 Stack/Vent Number SV 046 Chemical Engineering Desgin Capacity 190 MMBtu/hr Standardized Flow Rate 308,345 scfm @ 32o F Chemical Plant Cost Index Expected Utiliztion Rate 93% Temperature 129 Deg F 1998/1999 390 Expected Annual Hours of Operation 6,599 Hours Moisture Content 13.8% 2005 465 Annual Interest Rate 7.0% Actual Flow Rate 369,137 acfm Inflation Adj 1.19 Expected Equipment Life 20 yrs Standardized Flow Rate 330,907 scfm @ 68o F Dry Std Flow Rate 285,110 dscfm @ 68o F

CONTROL EQUIPMENT COSTS Capital Costs Direct Capital Costs Purchased Equipment (A) 611,190 Purchased Equipment Total (B) 22% of control device cost (A) 742,596

Installation - Standard Costs 30% of purchased equip cost (B) 222,779 Installation - Site Specific Costs 6,200,000 Installation Total 6,422,779 Total Direct Capital Cost, DC 7,165,375 Total Indirect Capital Costs, IC 31% of purchased equip cost (B) 230,205 Total Capital Investment (TCI) = DC + IC 7,395,580
Operating Costs 364963.028 Total Annual Direct Operating Costs Labor, supervision, materials, replacement parts, utilities, etc. 9,431,473 Total Annual Indirect Operating Costs Sum indirect oper costs + capital recovery cost 1,030,178 Total Annual Cost (Annualized Capital Cost + Operating Cost) 10,461,651

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 2C:\Users\jwiseman\AppData\Local\Microsoft\Windows\Temporary Internet Files\Content.Outlook\BY708G8J\United Taconite Control Costs (2007-01-25).xls EU040 Reheat EU040 Reheat 2 of 4 

## Cleveland Cliffs Incorporated: United Taconite BART Report - <Appendix A> Emission Control Cost Analysis <Table 8>: - Summary of Utility, Chemical and Supply Costs

CAPITAL COSTS Direct Capital Costs

Purchased Equipment (A) (1) 611,190

Purchased Equipment Costs (A) - Absorber + packing + auxillary equipment, EC Instrumentation 10% of control device cost (A) 61,119 MN Sales Taxes 6.5% of control device cost (A) 39,727 Freight 5% of control device cost (A) 30,560 Purchased Equipment Total (B) 22% 742,596

Installation

Foundations & supports 8% of purchased equip cost (B) 59,408 Handling & erection 14% of purchased equip cost (B) 103,963 Electrical 4% of purchased equip cost (B) 29,704 Piping 2% of purchased equip cost (B) 14,852 Insulation 1% of purchased equip cost (B) 7,426 Painting 1% of purchased equip cost (B) 7,426 Installation Subtotal Standard Expenses 30% 222,779

Site Preparation, as required Site Specific 1,400,000 Buildings, as required Site Specific 4,800,000 Site Specific - Other Site Specific 0 Total Site Specific Costs 6,200,000 Installation Total 6,422,779 Total Direct Capital Cost, DC 7,165,375

Indirect Capital Costs Engineering, supervision 10% of purchased equip cost (B) 74,260 Construction & field expenses 5% of purchased equip cost (B) 37,130 Contractor fees 10% of purchased equip cost (B) 74,260 Start-up 2% of purchased equip cost (B) 14,852 Performance test 1% of purchased equip cost (B) 7,426 Model Studies of purchased equip cost (B) 0 Contingencies 3% of purchased equip cost (B) 22,278 Total Indirect Capital Costs, IC 31% of purchased equip cost (B) 230,205
Total Capital Investment (TCI) = DC + IC 7,395,580
Adjusted TCI for Replacement Parts (Catalyst, Filter Bags, etc) for Capital Recovery Cost 7,395,580



### OPERATING COSTS Direct Annual Operating Costs, DC

Operating Labor

Operator 45.31 $/Hr, 0.5 hr/8 hr shift, 6598.9 hr/yr 18,687 Supervisor 15% 15% of Operator Costs 2,803 Maintenance

Maintenance Labor 47.22 $/Hr, 0.5 hr/8 hr shift, 6598.9 hr/yr 19,475 Maintenance Materials 100% of maintenance labor costs 19,475 Utilities, Supplies, Replacements & Waste Management

Electricity 0.04 $/kwh, 1,368 kW-hr, 6598.9 hr/yr, 93% utilization 335,730 Natural Gas 12.81 $/mscf, 1,915 scfm, 6598.9 hr/yr, 93% utilization 9,035,303 Total Annual Direct Operating Costs 9,431,473
Indirect Operating Costs Overhead 60% of total labor and material costs 36,264 Administration (2% total capital costs) 2% of total capital costs (TCI) 147,912 Property tax (1% total capital costs) 1% of total capital costs (TCI) 73,956 Insurance (1% total capital costs) 1% of total capital costs (TCI) 73,956 Capital Recovery 0.0944 for a 20- year equipment life and a 7% interest rate 698,090 Total Annual Indirect Operating Costs Sum indirect oper costs + capital recovery cost 1,030,178

Total Annual Cost (Annualized Capital Cost + Operating Cost) 10,461,651

See Summary page for notes and assumptionsC:\Users\jwiseman\AppData\Local\Microsoft\Windows\Temporary Internet Files\Content.Outlook\BY708G8J\United Taconite Control Costs (2007-01-25).xls EU040 Reheat EU040 Reheat 3 of 4 

## Cleveland Cliffs Incorporated: United Taconite BART Report - <Appendix A> Emission Control Cost Analysis Table 4: -Summary of Utility, Chemical ans Supply Costs

Capital Recovery Factors Primary Installation Interest Rate 7.00% Equipment Life 20 years CRF 0.0944

Replacement Catalyst: Catalyst Equipment Life 3 years CRF 0.3811 Rep part cost per unit #REF! $/ft3 Amount Required 39 ft3 Catalyst Cost #REF! Cost adjusted for freight & sales tax Installation Labor #REF! 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 Δ P in H2O Efficiency Hp kW Blower, Thermal 369,137 19 0.6 1,367.7 EPA Cost Cont Manual 6th ed - Oxidizders Chapter 2.5.2.1 Blower, Catalytic 369,137 23 0.6 1,655.6 EPA Cost Cont Manual 6th ed - Oxidizders Chapter 2.5.2.1

Oxidizer Type thermal (catalytic or thermal) 1367.7

Reagent Use & Other Operating Costs Oxidizers - NA

Operating Cost Calculations Annual hours of operation: 6,599 Utilization Rate: 93%

Unit Unit of Use Unit of Annual Annual Comments Item Cost $ Measure Rate Measure Use* Cost Operating Labor Op Labor 45.31 $/Hr 0.5 hr/8 hr shift 412 18,687 $/Hr, 0.5 hr/8 hr shift, 6598.9 hr/yr Supervisor 15% of Op. NA 2,803 15% of Operator Costs Maintenance Maint Labor 47.22 $/Hr 0.5 hr/8 hr shift 412 19,475 $/Hr, 0.5 hr/8 hr shift, 6598.9 hr/yr Maint Mtls 100 % of Maintenance Labor NA 19,475 100% of Maintenance Labor Utilities, Supplies, Replacements & Waste Management Electricity 0.040 $/kwh 1367.7 kW-hr 8,393,252 335,730 $/kwh, 1,368 kW-hr, 6598.9 hr/yr, 93% utilization Natural Gas 12.81 $/mscf 1,915 scfm 705,149 9,035,303 $/mscf, 1,915 scfm, 6598.9 hr/yr, 93% utilization

*annual use rate is in same units of measurement as the unit cost factor
See Summary page for notes and assumptionsC:\Users\jwiseman\AppData\Local\Microsoft\Windows\Temporary Internet Files\Content.Outlook\BY708G8J\United Taconite Control Costs (2007-01-25).xls EU040 Reheat EU040 Reheat 4 of 4 

## Cleveland Cliffs Incorporated: United Taconite BART Report - <Appendix A> Emission Control Cost Analysis <Table 8>: - Summary of Utility, Chemical and Supply Costs

Flue Gas Re-Heat Equipment Cost Estimate Basis Thermal Oxidizer with 70% Heat Recovery
Auxiliary Fuel Use Equation 3.19 Twi 129 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 564 Deg F - Temperature of waste gas out of heat recovery

Tfo 315 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) pwg 0.0739 lb/scf - Density of waste gas (air) at 77 Deg F paf 0.0408 lb/scf - Density of auxiliary fuel (methane) at 77 Deg F Qwg 330,907 scfm - Flow of waste gas

Qaf 1,915 scfm - Flow of auxiliary fuel

Year 2005 Inflation Rate 3.0% Cost Calculations 332,822 scfm Flue Gas Cost in 1989 $'s $512,611 Current Cost Using CHE Plant Cost Index $611,190 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)C:\Users\jwiseman\AppData\Local\Microsoft\Windows\Temporary Internet Files\Content.Outlook\BY708G8J\United Taconite Control Costs (2007-01-25).xls EU042 SCR EU042 SCR 1 of 3 

## Cleveland Cliffs Incorporated: United Taconite BART Report - <Appendix A> Emission Control Cost Analysis Table 9: -Summary of Utility, Chemical and Supply Costs

Operating Unit: Line 2 Pellet Induration

Emission Unit Number EU 042 Stack/Vent Number SV 048 & 049 Desgin Capacity 400 mmbtu/hr Standardized Flow Rate 615,086 scfm @ 32o F Expected Utiliztion Rate 93% Temperature 121 Deg F Expected Annual Hours of Operation 8,688 Hours Moisture Content 13.8% Annual Interest Rate 7.0% Actual Flow Rate 726,000 acfm Expected Equipment Life 20 yrs Standardized Flow Rate 660,092 scfm @ 68o F Dry Std Flow Rate 568,896 dscfm @ 68o F

CONTROL EQUIPMENT COSTS Capital Costs Direct Capital Costs EPRI Correlation Purchased Equipment (A) 22,410,519 Purchased Equipment Total (B) SCR Only 23,867,203 SCR + Reheat 24,749,741

Total Capital Investment (TCI) = DC + IC SCR + Reheat 70,838,846
Operating Costs Total Annual Direct Operating Costs Labor, supervision, materials, replacement parts, utilities, etc. SCR + Reheat 26,832,859 Total Annual Indirect Operating Costs Sum indirect oper costs + capital recovery cost SCR + Reheat 7,024,035 Total Annual Cost (Annualized Capital Cost + Operating Cost) SCR + Reheat 33,856,894



### 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) 1,633.3 8.7 0.02 35.0 1,598.3 21,183

Notes & Assumptions 1 Calculations per EPA Air Pollution Control Cost Manual 6th Ed 2002, Section 4.2 Chapter 2 2 Estimated Equipment Cost per EPA Air Pollution Control Cost Manual 6th Ed 2002, Section 4.2 Chapter 2. 3 CUECost Workbook Version 1.0, USEPA Document Page 2. 4 Catalyst replacement every three years. This requires an additional 2 week outage per 3 year outage cycle, annualized to 4.7 days.C:\Users\jwiseman\AppData\Local\Microsoft\Windows\Temporary Internet Files\Content.Outlook\BY708G8J\United Taconite Control Costs (2007-01-25).xls EU042 SCR EU042 SCR 2 of 3 

## Cleveland Cliffs Incorporated: United Taconite BART Report - <Appendix A> Emission Control Cost Analysis Table 9: -Summary of Utility, Chemical and Supply Costs

CAPITAL COSTS (1) Direct Capital Costs

Purchased Equipment (A) (2)

Purchased Equipment Costs (A) - Absorber + packing + auxillary equipment, EC 22,410,519 Instrumentation 10% of control device cost (A) NA MN Sales Taxes 6.5% of control device cost (A) 1,456,684 Freight 5% of control device cost (A) NA Purchased Equipment Total (A) 23,867,203

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 11% Replacement Power, two weeks 2,643,899
Total Indirect Installation Costs (B) 11% of purchased equip cost (A) 2,643,899

Project Contingeny ( C) 15% of (A + B) 3,976,665

Total Plant Cost D A + B + C 30,487,767
Allowance for Funds During Construction (E) Additional 10 week outage for installation 8,232,000

Pre Production Costs (G) 2% of (D+E)) 774,395
Inventory Capital Reagent Vol * $/gal 17,062

Total Capital Investment (TCI) = DC + IC D + E + F + G +H + I 39,511,225 Retrofit multiplier3 60% of TCI 23,706,735 Adjusted TCI for Replacement Parts (Catalyst, Filter Bags, etc) for Capital Recovery Cost NA Total Retrofit Capital 63,217,960 

### OPERATING COSTS Direct Annual Operating Costs, DC

Operating Labor

Operator NA - Supervisor NA - Maintenance

Maintenance Total 1.50 % of Total Capital Investment 592,668 Maintenance Materials NA % of Maintenance Labor - Utilities, Supplies, Replacements & Waste Management

Electricity 0.04 $/kwh, 1,307 kW-hr, 8687.8 hr/yr, 93% utilization 422,407 SCR Catalyst 141.00 Catalyst Replacement 442,926 Ammonia (29% aqua.) 0.12 $/lb, 503 lb/hr, 8687.8 hr/yr, 93% utilization 489,909 Total Annual Direct Operating Costs 1,947,911
Indirect Operating Costs Overhead NAof total labor and material costs NA Administration (2% total capital costs) NAof total capital costs (TCI) NA Property tax (1% total capital costs) NAof total capital costs (TCI) NA Insurance (1% total capital costs) NAof total capital costs (TCI) NA Capital Recovery 0.0944 for a 20- year equipment life and a 7% interest rate 5,967,328 Total Annual Indirect Operating Costs Sum indirect oper costs + capital recovery cost 5,967,328

Total Annual Cost (Annualized Capital Cost + Operating Cost) 7,915,239

See Summary page for notes and assumptionsC:\Users\jwiseman\AppData\Local\Microsoft\Windows\Temporary Internet Files\Content.Outlook\BY708G8J\United Taconite Control Costs (2007-01-25).xls EU042 SCR EU042 SCR 3 of 3 

## Cleveland Cliffs Incorporated: United Taconite BART Report - <Appendix A> Emission Control Cost Analysis Table 9: -Summary of Utility, Chemical and Supply Costs

Capital Recovery Factors Primary Installation Interest Rate 7.00% Equipment Life 20 years CRF 0.0944
Equivalent Duty 3,462 Plant Cap kW A 355,097 Est power platn eff 35% Unc Nox lb/mmB B 0.11 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 355,097 Capital Cost $/k D $63.11 $22,410,519.46 Total SCR Equipment Uncontrolled Nox t/y 1,633.3 Fixed O&M E $147,909.43 Annual Operating Hrs 8000 Variable O&M F $598,961.39 Uncontrolled Nox lb/mm 0.108 Ann Cap Factor G 0.82 Heat Input mmB H 6,000

Replacement Catayst Estimate amount of catalyst required Equipment Life 24,000 hours Vol. #1 2708 ft3 Cormetech, Inc. FCW 0.3111 Flow #1 177,000 scfm Cormetech, Inc. Rep part cost per unit $141 Flow #2 660,092 scfm Vol #2 10099.0 ft3 Amount Required 10,099 ft3 Catalyst Cost $1,423,964 Y catalyst life factor 3 Years Annualized Cost 442,926

Electrical Use Duty 3,462 MMBtu/hr kW NOx Cont Eff 80% (as faction) Power 1,307.0 NOx in 0.11 lb/MMBtu n catalyst layers 4 layers Press drop catalyst 1 in H2O per layer Press drop duct 3 in H2O Total 1307.0
Reagent Use & Other Operating Costs Ammonia Use 56.0 lb/ft3Density
146 lb/hr Neat 67.2 gal/hr 29% solution Volume 14 day inventory 22,568 gal $17,062 Inventory Cost 503 lb/hr

Design Basis Baseline EmBaseline EmisMax Emis. (Model) Control Eff (%) Cont. Emis (lb/MMBtu) T/yr lb/MMBtu lb/hr 80% 0.02 Nitrous Oxide 1633.31 0.108 375.17

Actual 85,334 dscf/MMBtu Method 19 Factor 9,860 dscf/MMBtu Adjusted Duty 3,462 MMBtu/hr
Operating Cost Calculations Annual hours of operation: 8,688 Utilization Rate: 93%

Unit Unit of Use Unit of Annual Annual Comments Item Cost $ Measure Rate Measure Use* Cost Operating Labor Op Labor 45.31 $/Hr 0.0 hr/8 hr shift 0 0 $/Hr, 0.0 hr/8 hr shift, 8687.8 hr/yr Supervisor 15% of Op. NA

- 15% of Operator Costs Maintenance 0.00 Maintenance Total 1.5 % of Total Capital Investment 592,668 % of Total Capital Investment Maint Mtls 0 % of Maintenance Labor NA 0 0% of Maintenance Labor Utilities, Supplies, Replacements & Waste Management Electricity 0.040 $/kwh 1307.0 kW-hr 10,560,183 422,407 $/kwh, 1,307 kW-hr, 8687.8 hr/yr, 93% utilization SCR Catalyst 141 $/ft3 442,926 Catalyst Replacement Ammonia (29% aqua.) 0.12 $/lb 503 lb/hr 4,062,288 489,909 $/lb, 503 lb/hr, 8687.8 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 assumptionsC:\Users\jwiseman\AppData\Local\Microsoft\Windows\Temporary Internet Files\Content.Outlook\BY708G8J\United Taconite Control Costs (2007-01-25).xls EU042 Reheat EU042 Reheat 1 of 4 

## Cleveland Cliffs Incorporated: United Taconite BART Report - <Appendix A> Emission Control Cost Analysis Table 10: -Summary of Utility, Chemical and Supply Costs

Operating Unit: Line 2 Pellet Induration

Emission Unit Number EU 042 Stack/Vent Number SV 048 & 049 Chemical Engineering Desgin Capacity 400 MMBtu/hr Standardized Flow Rate 615,086 scfm @ 32o F Chemical Plant Cost Index Expected Utiliztion Rate 93% Temperature 121 Deg F 1998/1999 390 Expected Annual Hours of Operation 8,688 Hours Moisture Content 13.8% 2005 465 Annual Interest Rate 7.0% Actual Flow Rate 726,000 acfm Inflation Adj 1.19 Expected Equipment Life 20 yrs Standardized Flow Rate 660,092 scfm @ 68o F Dry Std Flow Rate 568,896 dscfm @ 68o F

CONTROL EQUIPMENT COSTS Capital Costs Direct Capital Costs Purchased Equipment (A) 726,369 Purchased Equipment Total (B) 22% of control device cost (A) 882,538

Installation - Standard Costs 30% of purchased equip cost (B) 264,761 Installation - Site Specific Costs 6,200,000 Installation Total 6,464,761 Total Direct Capital Cost, DC 7,347,300 Total Indirect Capital Costs, IC 31% of purchased equip cost (B) 273,587 Total Capital Investment (TCI) = DC + IC 7,620,886
Operating Costs 364963.028 Total Annual Direct Operating Costs Labor, supervision, materials, replacement parts, utilities, etc. 24,884,948 Total Annual Indirect Operating Costs Sum indirect oper costs + capital recovery cost 1,056,707 Total Annual Cost (Annualized Capital Cost + Operating Cost) 25,941,655

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 2C:\Users\jwiseman\AppData\Local\Microsoft\Windows\Temporary Internet Files\Content.Outlook\BY708G8J\United Taconite Control Costs (2007-01-25).xls EU042 Reheat EU042 Reheat 2 of 4 

## Cleveland Cliffs Incorporated: United Taconite BART Report - <Appendix A> Emission Control Cost Analysis Table 10: -Summary of Utility, Chemical and Supply Costs

CAPITAL COSTS Direct Capital Costs

Purchased Equipment (A) (1) 726,369

Purchased Equipment Costs (A) - Absorber + packing + auxillary equipment, EC Instrumentation 10% of control device cost (A) 72,637 MN Sales Taxes 6.5% of control device cost (A) 47,214 Freight 5% of control device cost (A) 36,318 Purchased Equipment Total (B) 22% 882,538

Installation

Foundations & supports 8% of purchased equip cost (B) 70,603 Handling & erection 14% of purchased equip cost (B) 123,555 Electrical 4% of purchased equip cost (B) 35,302 Piping 2% of purchased equip cost (B) 17,651 Insulation 1% of purchased equip cost (B) 8,825 Painting 1% of purchased equip cost (B) 8,825 Installation Subtotal Standard Expenses 30% 264,761

Site Preparation, as required Site Specific 1,400,000 Buildings, as required Site Specific 4,800,000 Site Specific - Other Site Specific 0 Total Site Specific Costs 6,200,000 Installation Total 6,464,761 Total Direct Capital Cost, DC 7,347,300

Indirect Capital Costs Engineering, supervision 10% of purchased equip cost (B) 88,254 Construction & field expenses 5% of purchased equip cost (B) 44,127 Contractor fees 10% of purchased equip cost (B) 88,254 Start-up 2% of purchased equip cost (B) 17,651 Performance test 1% of purchased equip cost (B) 8,825 Model Studies of purchased equip cost (B) 0 Contingencies 3% of purchased equip cost (B) 26,476 Total Indirect Capital Costs, IC 31% of purchased equip cost (B) 273,587
Total Capital Investment (TCI) = DC + IC 7,620,886
Adjusted TCI for Replacement Parts (Catalyst, Filter Bags, etc) for Capital Recovery Cost 7,620,886



### OPERATING COSTS Direct Annual Operating Costs, DC

Operating Labor

Operator 45.31 $/Hr, 0.5 hr/8 hr shift, 8687.8 hr/yr 24,603 Supervisor 15% 15% of Operator Costs 3,690 Maintenance

Maintenance Labor 47.22 $/Hr, 0.5 hr/8 hr shift, 8687.8 hr/yr 25,640 Maintenance Materials 100% of maintenance labor costs 256 Utilities, Supplies, Replacements & Waste Management

Electricity 0.04 $/kwh, 2,690 kW-hr, 8687.8 hr/yr, 93% utilization 869,316 Natural Gas 12.81 $/mscf, 3,858 scfm, 8687.8 hr/yr, 93% utilization 23,961,443

Total Annual Direct Operating Costs 24,884,948
Indirect Operating Costs Overhead 60% of total labor and material costs 32,514 Administration (2% total capital costs) 2% of total capital costs (TCI) 152,418 Property tax (1% total capital costs) 1% of total capital costs (TCI) 76,209 Insurance (1% total capital costs) 1% of total capital costs (TCI) 76,209 Capital Recovery 0.0944 for a 20- year equipment life and a 7% interest rate 719,358 Total Annual Indirect Operating Costs Sum indirect oper costs + capital recovery cost 1,056,707

Total Annual Cost (Annualized Capital Cost + Operating Cost) 25,941,655

See Summary page for notes and assumptionsC:\Users\jwiseman\AppData\Local\Microsoft\Windows\Temporary Internet Files\Content.Outlook\BY708G8J\United Taconite Control Costs (2007-01-25).xls EU042 Reheat EU042 Reheat 3 of 4 

## Cleveland Cliffs Incorporated: United Taconite BART Report - <Appendix A> Emission Control Cost Analysis Table 10: -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 3 years CRF 0.3811 Rep part cost per unit #REF! $/ft3 Amount Required 39 ft3 Catalyst Cost #REF! Cost adjusted for freight & sales tax Installation Labor #REF! 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 Δ P in H2O Efficiency Hp kW Blower, Thermal 726,000 19 0.6 2,689.8 EPA Cost Cont Manual 6th ed - Oxidizders Chapter 2.5.2.1 Blower, Catalytic 726,000 23 0.6 3,256.1 EPA Cost Cont Manual 6th ed - Oxidizders Chapter 2.5.2.1

Oxidizer Type thermal (catalytic or thermal) 2689.8

Reagent Use & Other Operating Costs Oxidizers - NA

Operating Cost Calculations Annual hours of operation: 8,688 Utilization Rate: 93%

Unit Unit of Use Unit of Annual Annual Comments Item Cost $ Measure Rate Measure Use* Cost Operating Labor Op Labor 45.31 $/Hr 0.5 hr/8 hr shift 543 24,603 $/Hr, 0.5 hr/8 hr shift, 8687.8 hr/yr Supervisor 15% of Op. NA 3,690 15% of Operator Costs Maintenance 0% Maint Labor 47.22 $/Hr 0.5 hr/8 hr shift 543 25,640 $/Hr, 0.5 hr/8 hr shift, 8687.8 hr/yr Maint Mtls 100% % of Maintenance Labor NA 256 1% of Maintenance Labor Utilities, Supplies, Replacements & Waste Management Electricity 0.04 $/kwh 2689.8 kW-hr 21,732,896 869,316 $/kwh, 2,690 kW-hr, 8687.8 hr/yr, 93% utilization Natural Gas 12.81 $/mscf 3,858 scfm 1,870,042 23,961,443 $/mscf, 3,858 scfm, 8687.8 hr/yr, 93% utilization

*annual use rate is in same units of measurement as the unit cost factor
See Summary page for notes and assumptionsC:\Users\jwiseman\AppData\Local\Microsoft\Windows\Temporary Internet Files\Content.Outlook\BY708G8J\United Taconite Control Costs (2007-01-25).xls EU042 Reheat EU042 Reheat 4 of 4 

## Cleveland Cliffs Incorporated: United Taconite BART Report - <Appendix A> Emission Control Cost Analysis Table 10: -Summary of Utility, Chemical and Supply Costs

Flue Gas Re-Heat Equipment Cost Estimate Basis Thermal Oxidizer with 70% Heat Recovery
Auxiliary Fuel Use Equation 3.19 Twi 121 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 310 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) pwg 0.0739 lb/scf - Density of waste gas (air) at 77 Deg F paf 0.0408 lb/scf - Density of auxiliary fuel (methane) at 77 Deg F Qwg 660,092 scfm - Flow of waste gas

Qaf 3,858 scfm - Flow of auxiliary fuel

Year 2005 Inflation Rate 3.0% Cost Calculations 663,950 scfm Flue Gas Cost in 1989 $'s $609,213 Current Cost Using CHE Plant Cost Index $726,369 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)C:\Users\jwiseman\AppData\Local\Microsoft\Windows\Temporary Internet Files\Content.Outlook\BY708G8J\United Taconite Control Costs (2007-01-25).xls EU042 SCR NG EU042 SCR NG 1 of 3 

## Cleveland Cliffs Incorporated: United Taconite BART Report - <Appendix A> Emission Control Cost Analysis Table 11: -Summary of Utility, Chemical and Supply Costs

Operating Unit: Line 2 Pellet Induration

Emission Unit Number EU 042 Stack/Vent Number SV 048 & 049 Desgin Capacity 400 MMBtu/hr Standardized Flow Rate 615,086 scfm @ 32o F Expected Utiliztion Rate 93% Temperature 121 Deg F Expected Annual Hours of Operation 8,688 Hours Moisture Content 13.8% Annual Interest Rate 7.0% Actual Flow Rate 726,000 acfm Expected Equipment Life 20 yrs Standardized Flow Rate 660,092 scfm @ 68o F Dry Std Flow Rate 568,896 dscfm @ 68o F

CONTROL EQUIPMENT COSTS Capital Costs Direct Capital Costs EPRI Correlation Purchased Equipment (A) 23,080,776 Purchased Equipment Total (B) SCR Only 24,581,027 SCR + Reheat 25,463,565

Total Capital Investment (TCI) = DC + IC SCR + Reheat 72,298,312
Operating Costs 364963.028 Total Annual Direct Operating Costs Labor, supervision, materials, replacement parts, utilities, etc. SCR + Reheat 29,040,535 Total Annual Indirect Operating Costs Sum indirect oper costs + capital recovery cost SCR + Reheat 7,161,798 Total Annual Cost (Annualized Capital Cost + Operating Cost) SCR + Reheat 36,202,334



### 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) 8,164.5 46.7 0.12 188.7 7,975.8 4,539

Notes & Assumptions 1 Calculations per EPA Air Pollution Control Cost Manual 6th Ed 2002, Section 4.2 Chapter 2 2 Estimated Equipment Cost per EPA Air Pollution Control Cost Manual 6th Ed 2002, Section 4.2 Chapter 2. 3 CUECost Workbook Version 1.0, USEPA Document Page 2. 4 Catalyst replacement every three years. This requires an additional 2 week outage per 3 year outage cycle, annualized to 4.7 days.C:\Users\jwiseman\AppData\Local\Microsoft\Windows\Temporary Internet Files\Content.Outlook\BY708G8J\United Taconite Control Costs (2007-01-25).xls EU042 SCR NG EU042 SCR NG 2 of 3 

## Cleveland Cliffs Incorporated: United Taconite BART Report - <Appendix A> Emission Control Cost Analysis Table 11: -Summary of Utility, Chemical and Supply Costs

CAPITAL COSTS (1) Direct Capital Costs

Purchased Equipment (A) (2)

Purchased Equipment Costs (A) - Absorber + packing + auxillary equipment, EC 23,080,776 Instrumentation 10% of control device cost (A) NA MN Sales Taxes 6.5% of control device cost (A) 1,500,250 Freight 5% of control device cost (A) NA Purchased Equipment Total (A) 24,581,027

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 11% Replacement Power, two weeks 2,643,899
Total Indirect Installation Costs (B) 11% of purchased equip cost (A) 2,643,899

Project Contingeny ( C) 15% of (A + B) 4,083,739

Total Plant Cost D A + B + C 31,308,664
Allowance for Funds During Construction (E) Additional 10 week outage for installation 8,232,000

Pre Production Costs (G) 2% of (D+E)) 790,813
Inventory Capital Reagent Vol * $/gal 91,914

Total Capital Investment (TCI) = DC + IC D + E + F + G +H + I 40,423,391 Retrofit multiplier3 60% of TCI 24,254,035 Adjusted TCI for Replacement Parts (Catalyst, Filter Bags, etc) for Capital Recovery Cost NA Total Retrofit Capital 64,677,426 

### OPERATING COSTS Direct Annual Operating Costs, DC

Operating Labor

Operator NA - Supervisor NA - Maintenance

Maintenance Total 1.50 % of Total Capital Investment 606,351 Maintenance Materials NA % of Maintenance Labor - Utilities, Supplies, Replacements & Waste Management

Electricity 0.04 $/kwh, 1,446 kW-hr, 8687.8 hr/yr, 93% utilization 467,200 SCR Catalyst 141.00 Catalyst Replacement 442,926 Ammonia (29% aqua.) 0.12 $/lb, 2,708 lb/hr, 8687.8 hr/yr, 93% utilization 2,639,110 Total Annual Direct Operating Costs 4,155,587
Indirect Operating Costs Overhead NAof total labor and material costs NA Administration (2% total capital costs) NAof total capital costs (TCI) NA Property tax (1% total capital costs) NAof total capital costs (TCI) NA Insurance (1% total capital costs) NAof total capital costs (TCI) NA Capital Recovery 0.0944 for a 20- year equipment life and a 7% interest rate 6,105,091 Total Annual Indirect Operating Costs Sum indirect oper costs + capital recovery cost 6,105,091

Total Annual Cost (Annualized Capital Cost + Operating Cost) 10,260,679

See Summary page for notes and assumptionsC:\Users\jwiseman\AppData\Local\Microsoft\Windows\Temporary Internet Files\Content.Outlook\BY708G8J\United Taconite Control Costs (2007-01-25).xls EU042 SCR NG EU042 SCR NG 3 of 3 

## Cleveland Cliffs Incorporated: United Taconite BART Report - <Appendix A> Emission Control Cost Analysis Table 11: -Summary of Utility, Chemical and Supply Costs

Capital Recovery Factors Primary Installation Interest Rate 7.00% Equipment Life 20 years CRF 0.0944
Equivalent Duty 3,462 Plant Cap kW A 355,097 Est power platn eff 35% Unc Nox lb/mmB B 0.58 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 355,097 Capital Cost $/k D $65.00 $23,080,776.17 Total SCR Equipment Uncontrolled Nox t/y 8,164.5 Fixed O&M E $152,333.12 Annual Operating Hrs 8000 Variable O&M F $626,908.01 Uncontrolled Nox lb/mm 0.584 Ann Cap Factor G 0.82 Heat Input mmB H 6,000 SCR Capital Cost
Replacement Catayst Estimate amount of catalyst required Equipment Life 24,000 hours Vol. #1 2708 ft3 Cormetech, Inc. FCW 0.3111 Flow #1 177,000 scfm Cormetech, Inc. Rep part cost per unit $141 Flow #2 660,092 scfm Vol #2 10099.0 ft3 Amount Required 10,099 ft3 Catalyst Cost $1,423,964 Y catalyst life factor 3 Years Annualized Cost 442,926

Electrical Use Duty 3,462 MMBtu/hr kW NOx Cont Eff 80% (as faction) Power 1,445.6 NOx in 0.58 lb/MMBtu n catalyst layers 4 layers Press drop catalyst 1 in H2O per layer Press drop duct 3 in H2O Total 1445.6
Reagent Use & Other Operating Costs Ammonia Use 56.0 lb/ft3Density
785 lb/hr Neat 361.8 gal/hr 29% solution Volume 14 day inventory 121,571 gal $91,914 Inventory Cost 2708 lb/hr

Design Basis Baseline EmBaseline EmisMax Emis. (Model) Control Eff (%) Cont. Emis (lb/MMBtu) T/yr lb/MMBtu lb/hr 80% 0.12 Nitrous Oxide 1633.31 0.584 375.17

Actual 85,334 dscf/MMBtu Method 19 Factor 9,860 dscf/MMBtu Adjusted Duty 3,462 MMBtu/hr
Operating Cost Calculations Annual hours of operation: 8,688 Utilization Rate: 93%

Unit Unit of Use Unit of Annual Annual Comments Item Cost $ Measure Rate Measure Use* Cost Operating Labor Op Labor 45.31 $/Hr 0.0 hr/8 hr shift 0 0 $/Hr, 0.0 hr/8 hr shift, 8687.8 hr/yr Supervisor 15% of Op. NA

- 15% of Operator Costs Maintenance 0.00 Maintenance Total 1.5 % of Total Capital Investment 606,351 % of Total Capital Investment Maint Mtls 0 % of Maintenance Labor NA 0 0% of Maintenance Labor Utilities, Supplies, Replacements & Waste Management Electricity 0.040 $/kwh 1445.6 kW-hr 11,679,995 467,200 $/kwh, 1,446 kW-hr, 8687.8 hr/yr, 93% utilization SCR Catalyst 141 $/ft3 442,926 Catalyst Replacement Ammonia (29% aqua.) 0.12 $/lb 2708 lb/hr 21,883,299 2,639,110 $/lb, 2,708 lb/hr, 8687.8 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 assumptionsC:\Users\jwiseman\AppData\Local\Microsoft\Windows\Temporary Internet Files\Content.Outlook\BY708G8J\United Taconite Control Costs (2007-01-25).xls EU042 Reheat NG EU042 Reheat NG 1 of 4 

## Cleveland Cliffs Incorporated: United Taconite BART Report - <Appendix A> Emission Control Cost Analysis Table 12: -Summary of Utility, Chemical and Supply Costs

Operating Unit: Line 2 Pellet Induration

Emission Unit Number EU 042 Stack/Vent Number SV 048 & 049 Chemical Engineering Desgin Capacity 400 MMBtu/hr Standardized Flow Rate 615,086 scfm @ 32o F Chemical Plant Cost Index Expected Utiliztion Rate 93% Temperature 121 Deg F 1998/1999 390 Expected Annual Hours of Operation 8,688 Hours Moisture Content 13.8% 2005 465 Annual Interest Rate 7.0% Actual Flow Rate 726,000 acfm Inflation Adj 1.19 Expected Equipment Life 20 yrs Standardized Flow Rate 660,092 scfm @ 68o F Dry Std Flow Rate 568,896 dscfm @ 68o F

CONTROL EQUIPMENT COSTS Capital Costs Direct Capital Costs Purchased Equipment (A) 726,369 Purchased Equipment Total (B) 22% of control device cost (A) 882,538

Installation - Standard Costs 30% of purchased equip cost (B) 264,761 Installation - Site Specific Costs 6,200,000 Installation Total 6,464,761 Total Direct Capital Cost, DC 7,347,300 Total Indirect Capital Costs, IC 31% of purchased equip cost (B) 273,587 Total Capital Investment (TCI) = DC + IC 7,620,886
Operating Costs 364963.028 Total Annual Direct Operating Costs Labor, supervision, materials, replacement parts, utilities, etc. 24,884,948 Total Annual Indirect Operating Costs Sum indirect oper costs + capital recovery cost 1,056,707 Total Annual Cost (Annualized Capital Cost + Operating Cost) 25,941,655

Notes & Assumptions 1 Calculations per EPA Air Pollution Control Cost Manual 6th Ed 2002, Section 3.2 Chapter 2 2 Equipment cost estimate EPA Air Pollution Control Cost Manual 6th Ed 2002, Section 3.2 Chapter 2.5.1C:\Users\jwiseman\AppData\Local\Microsoft\Windows\Temporary Internet Files\Content.Outlook\BY708G8J\United Taconite Control Costs (2007-01-25).xls EU042 Reheat NG EU042 Reheat NG 2 of 4 

## Cleveland Cliffs Incorporated: United Taconite BART Report - <Appendix A> Emission Control Cost Analysis Table 12: -Summary of Utility, Chemical and Supply Costs

CAPITAL COSTS (1) Direct Capital Costs

Purchased Equipment (A) (2) 726,369

Purchased Equipment Costs (A) - Absorber + packing + auxillary equipment, EC Instrumentation 10% of control device cost (A) 72,637 MN Sales Taxes 6.5% of control device cost (A) 47,214 Freight 5% of control device cost (A) 36,318 Purchased Equipment Total (B) 22% 882,538

Installation

Foundations & supports 8% of purchased equip cost (B) 70,603 Handling & erection 14% of purchased equip cost (B) 123,555 Electrical 4% of purchased equip cost (B) 35,302 Piping 2% of purchased equip cost (B) 17,651 Insulation 1% of purchased equip cost (B) 8,825 Painting 1% of purchased equip cost (B) 8,825 Installation Subtotal Standard Expenses 30% 264,761

Site Preparation, as required Site Specific 1,400,000 Buildings, as required Site Specific 4,800,000 Site Specific - Other Site Specific 0 Total Site Specific Costs 6,200,000 Installation Total 6,464,761 Total Direct Capital Cost, DC 7,347,300

Indirect Capital Costs Engineering, supervision 10% of purchased equip cost (B) 88,254 Construction & field expenses 5% of purchased equip cost (B) 44,127 Contractor fees 10% of purchased equip cost (B) 88,254 Start-up 2% of purchased equip cost (B) 17,651 Performance test 1% of purchased equip cost (B) 8,825 Model Studies of purchased equip cost (B) 0 Contingencies 3% of purchased equip cost (B) 26,476 Total Indirect Capital Costs, IC 31% of purchased equip cost (B) 273,587
Total Capital Investment (TCI) = DC + IC 7,620,886
Adjusted TCI for Replacement Parts (Catalyst, Filter Bags, etc) for Capital Recovery Cost 7,620,886



### OPERATING COSTS Direct Annual Operating Costs, DC

Operating Labor

Operator 45.31 $/Hr, 0.5 hr/8 hr shift, 8687.8 hr/yr 24,603 Supervisor 15% 15% of Operator Costs 3,690 Maintenance

Maintenance Labor 47.22 $/Hr, 0.5 hr/8 hr shift, 8687.8 hr/yr 25,640 Maintenance Materials 100% of maintenance labor costs 256 Utilities, Supplies, Replacements & Waste Management

Electricity 0.04 $/kwh, 2,690 kW-hr, 8687.8 hr/yr, 93% utilization 869,316 Natural Gas 12.81 $/mscf, 3,858 scfm, 8687.8 hr/yr, 93% utilization 23,961,443

Total Annual Direct Operating Costs 24,884,948
Indirect Operating Costs Overhead 60% of total labor and material costs 32,514 Administration (2% total capital costs) 2% of total capital costs (TCI) 152,418 Property tax (1% total capital costs) 1% of total capital costs (TCI) 76,209 Insurance (1% total capital costs) 1% of total capital costs (TCI) 76,209 Capital Recovery 0.0944 for a 20- year equipment life and a 7% interest rate 719,358 Total Annual Indirect Operating Costs Sum indirect oper costs + capital recovery cost 1,056,707

Total Annual Cost (Annualized Capital Cost + Operating Cost) 25,941,655

See Summary page for notes and assumptionsC:\Users\jwiseman\AppData\Local\Microsoft\Windows\Temporary Internet Files\Content.Outlook\BY708G8J\United Taconite Control Costs (2007-01-25).xls EU042 Reheat NG EU042 Reheat NG 3 of 4 

## Cleveland Cliffs Incorporated: United Taconite BART Report - <Appendix A> Emission Control Cost Analysis Table 12: -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 3 years CRF 0.3811 Rep part cost per unit 0 $/ft3 Amount Required 39 ft3 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 Δ P in H2O Efficiency Hp kW Blower, Thermal 726,000 19 0.6 2,689.8 EPA Cost Cont Manual 6th ed - Oxidizders Chapter 2.5.2.1 Blower, Catalytic 726,000 23 0.6 3,256.1 EPA Cost Cont Manual 6th ed - Oxidizders Chapter 2.5.2.1

Oxidizer Type thermal (catalytic or thermal) 2689.8

Reagent Use & Other Operating Costs Oxidizers - NA

Operating Cost Calculations Annual hours of operation: 8,688 Utilization Rate: 93%

Unit Unit of Use Unit of Annual Annual Comments Item Cost $ Measure Rate Measure Use* Cost Operating Labor Op Labor 45.31 $/Hr 0.5 hr/8 hr shift 543 24,603 $/Hr, 0.5 hr/8 hr shift, 8687.8 hr/yr Supervisor 15% of Op. NA 3,690 15% of Operator Costs Maintenance 0% Maint Labor 47.22 $/Hr 0.5 hr/8 hr shift 543 25,640 $/Hr, 0.5 hr/8 hr shift, 8687.8 hr/yr Maint Mtls 100% % of Maintenance Labor NA 256 1% of Maintenance Labor Utilities, Supplies, Replacements & Waste Management Electricity 0.04 $/kwh 2689.8 kW-hr 21,732,896 869,316 $/kwh, 2,690 kW-hr, 8687.8 hr/yr, 93% utilization Natural Gas 12.81 $/mscf 3,858 scfm 1,870,042 23,961,443 $/mscf, 3,858 scfm, 8687.8 hr/yr, 93% utilization

*annual use rate is in same units of measurement as the unit cost factor
See Summary page for notes and assumptionsC:\Users\jwiseman\AppData\Local\Microsoft\Windows\Temporary Internet Files\Content.Outlook\BY708G8J\United Taconite Control Costs (2007-01-25).xls EU042 Reheat NG EU042 Reheat NG 4 of 4 

## Cleveland Cliffs Incorporated: United Taconite BART Report - <Appendix A> Emission Control Cost Analysis Table 12: -Summary of Utility, Chemical and Supply Costs

Flue Gas Re-Heat Equipment Cost Estimate Basis Thermal Oxidizer with 70% Heat Recovery
Auxiliary Fuel Use Equation 3.19 Twi 121 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 310 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) pwg 0.0739 lb/scf - Density of waste gas (air) at 77 Deg F paf 0.0408 lb/scf - Density of auxiliary fuel (methane) at 77 Deg F Qwg 660,092 scfm - Flow of waste gas

Qaf 3,858 scfm - Flow of auxiliary fuel

Year 2005 Inflation Rate 3.0% Cost Calculations 663,950 scfm Flue Gas Cost in 1989 $'s $609,213 Current Cost Using CHE Plant Cost Index $726,369 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)

## C:\Users\jwiseman\AppData\Local\Microsoft\Windows\Temporary Internet Files\Content.Outlook\BY708G8J\United Taconite Control Costs (2007-01-25).xls Actual Emissions 5/4/2012 Page 1 of 1 

# United Taconite - Actual Emissions1



## 2004 2005 SO2 

## NOx 

## SO2 

## NOx 

## EU 040 SV 046 Line 1 Pellet Induration 1.738 244.651 13.86 2151.237 EU 042 SV 048 & 049 Line 2 Pellet Induration 2749.681 1633.313 2699.906 1603.734

1) United Taconite Air Pollutant Emissions Inventory for Years 2004 and 2005 with 10% safety factor. Note: Tons/yr

## C:\Users\jwiseman\AppData\Local\Microsoft\Windows\Temporary Internet Files\Content.Outlook\BY708G8J\United Taconite Control Costs (2007-01-25).xls WWESP Scale 5/4/2012 Page 1 of 1 Inputs Calculated or scaled values Estimated value

1 2 3 4 5 6 7 8 9

Stack No Facility Name Flow Rate at Exit Specific Collection Area (SCA)1 

## Surface Collection Area2 

## Pressure Drop3 

## Cost4



## acfm ft2

## /kacfm ft2 

## in. H2

## 0 $ BASE N/A 291,000 198 68,825 5 4,700,000 SV 046 UTAC Line 1 Pellet Induration 369,137 198 87,305 10 5,420,940 SV 048 & 049 UTAC Line 2 Pellet Induration 726,000 198 171,708 10 8,134,372
1) Estimated value from Durr. Value indpendent of stack flow. 2) Original estimate from Durr. Scaled linearly using stack flow rates. 3) Pressure drop is not a design driving factor, but must be maintained at an acceptably low value. 10" H2

## O is used as a maximum value. 4) Capital price back calculated using reverse of EPA control cost manual factors from installed price estimate provided from DURR. Used 0.6 power law factor to adjust price to each stack's acfm from bid basis of 291,000 acfm.

## C:\Users\jwiseman\AppData\Local\Microsoft\Windows\Temporary Internet Files\Content.Outlook\BY708G8J\United Taconite Control Costs (2007-01-25).xls SO2 Scrubber Scale 5/4/2012 Page 1 of 1 Inputs Calculated or scaled values

1 2 3 4 5 6

Stack No Facility Name Actual Flow Rate at Exit Design Flow Rate

at Exit1 

## Cost2



## acfm $ BASE N/A N/A 500,000 3,700,000 SV 046 UTAC Line 1 Pellet Induration 369,137 434,279 3,400,016 SV 048 & 049 UTAC Line 2 Pellet Induration 726,000 854,118 5,101,881
1) Scrubber is designed for 15% more flow than the actual flow rate. 2) Capital cost ratioed off of original estimate from STS Consultants to account for different flow rate. Used 0.6 power law factor to adjust price to stack acfm from bid basis of 500,000 acfm.