Technical Memorandum

From: Barr Engineering

Subject: Tilden SO2 Control Cost Analysis

Date: September 28, 2012

1. Summary of SO2 Control Cost Analysis for Tilden Line 1

In the proposed Regional Haze Federal Implementation Program (FIP) for taconite indurating furnaces

located in Michigan and Minnesota, the United States Environmental Protection Agency (US EPA) has

proposed the installation of dry flue gas desulfurization (dry FGD) SO2 controls for Tilden Line 1. US

EPA claims that dry SO2 controls are economically feasible because they can be installed at Tilden at a

SO2 control cost effectiveness of $4,500 to $5,500 per ton of SO2 removed. However, this estimate is

based on information from a different taconite plant, and it does not consider site specific modifications

needed to install these controls (retrofit factors). Consideration of site specific costs associated with the

modifications needed to install emission controls is a valid factor in determining the cost effectiveness of

potential emission control technologies as BART. As noted in the 40 CFR Part 51 Appendix Y

guidelines for BART cost effectiveness analyses:

“Physical modifications needed to resolve technical obstacles do not, in themselves, provide a

justification for eliminating the control technique on the basis of technical infeasibility.

However, you may consider the cost of such modification in estimating costs. This in turn, may

form the basis for eliminating a control technology.”

There are several site specific technical obstacles to installing dry FGD controls on Tilden Line 1

including:
From: Barr Engineering Company

Subject: Tilden SO2 Control Cost Analysis

Date: September 28, 2012

Page: 2  Space limitations on where the dry FGD SO2 emission control equipment can be installed

 Limitations on where ductwork from Line 1 to the new emission control system can be located

due to the presence of existing equipment  Addition of induced draft fans to operate the emission control equipment. The existing fans were

not designed to overcome the additional pressure drop imposed by dry FGD controls.  Installation of a new stack at the outlet of the dry FGD emission control system. Given the high

cost of the ductwork, installation of a new stack is less expensive than installing ducts back to the

original stacks.

A control cost analysis for installation of dry FGD on Tilden Line 1 was prepared for this report in order

to document the overall cost of installing dry SO2 controls when the following factors are considered:

 Current supplier pricing based on design specifications for Tilden Line 1

 Site specific factors affecting the installation costs of SO2 controls on Tilden Line 1

 A construction schedule which takes site specific factors into account.

Dry FGD SO2 control costs were calculated using:  Budgetary emission control equipment cost estimates from a supplier for a Circulating Fluidized

Bed Absorber (CFBA) and from Ducon for a spray dryer absorber (SDA)  A pre-feasibility level engineering study was conducted to determine the installed cost of

modifications to Line 1 as described above.  Using supplier equipment cost information and the installed costs for the Line 1 modifications

necessary for installation of dry FGD, the overall installation and operating costs were calculated

per the procedures found in the U.S. EPA Air Pollution Control Cost Manual – Sixth Edition (EPA

452/B-02-001). These costs are summarized in Table 1 on the following page. The control cost

calculations are located in Appendix A of this report.

In addition, SO2 control costs were calculated using the installed equipment costs and operating costs

from the prefeasibility study. This analysis resulted in SO2 control costs similar to the SO2 control costs
From: Barr Engineering Company 

Subject: Tilden SO2 Control Cost Analysis 

Date: September 28, 2012 

Page: 3 

using EPA methods. In all cases listed in Table 1 the SO2 control costs are calculated using the 

anticipated annual SO2 emissions and the SO2 emission control performance specified by the proposed 

FIP limit of 5 ppm SO2. At SO2 control costs of $11,450 to $15,750 per ton SO2 removed, the costs of dry 

FGD for SO2 control are significantly higher than the $4,500 to $5,500 per ton SO2 removed EPA 

reported in the proposed FIP when site specific modification needed to install these emission control 

technologies are considered. 

Table 1 - Tilden Line 1 SO2 Cost Effectiveness with Site Specific Modifications Costs 

Included 

Dry FGD 

SO2 Control 

Technology 

Cost 

Estimating 

Procedure 

Total 

Installed 

Capital Cost

for Dry FGD 

Annual 

Operating 

Cost for Dry 

FGD - $/yr 

Annual SO2 

Emission 

Reduction 

tons/yr 

SO2 Control

Cost 

$/ton SO2 

removed 

Circulating 

Fluidized Bed 

Absorber 

EPA Control 

Cost Manual $64,400,000 $11,450,000 1000 $11,450 

Engineering 

Prefeasibility 

Study 

$63,100,000 $11,650,000 1000 $11,650 

Spray Dryer 

Absorber 

EPA Control 

Cost Manual $96,250,000 $15,750,000 1000 $15,750 

Engineering 

Prefeasibility 

Study 

$84,550,000 $14,500,000 1000 $14,550 

Using the anticipated annual baseline emission rate and a 95% control efficiency, SO2 concentrations at 

the outlet of a dry FGD on Tilden Line 1 would be below the CFBA supplier performance guarantee of 

5 ppm. Ducon proposed a performance guarantee of > 90% SO2 control for a SDA scrubber. The SO2 

emission reduction of 1,037.8 tons per year listed in Table V-B.36 of the proposed FIP did not use the 

anticipated annual emissions.1

. At a controlled SO2 concentration of 5 ppm, the calculated SO2 reduction 

is 999 tons per year. 

 

1

 The cost effectiveness guidance refers to use of “a realistic depiction of anticipated annual emissions for the source. 

.. for the existing sources subject to BART, you will estimate the anticipated annual emissions based upon actual 

emissions from a baseline period.” 40 CFR Part 51, App. Y D.4.d. 
From: Barr Engineering Company

Subject: Tilden SO2 Control Cost Analysis

Date: September 28, 2012

Page: 4

2. EPA Pollution Control Cost Manual Approach to

Estimating Pollution Control Cost Effectiveness

Pollution control cost effectiveness is the total annual cost (TAC) of the emission controls divided by the

emission reduction achieved by the emission controls.

In the US EPA Pollution Control Cost Manual (Control Cost Manual), the total annual cost is the sum

1of:  Direct operating costs such as labor, chemical, utilities and maintenance.

 Indirect operating costs including capital recovery costs, administration and employee benefits  The capital recovery cost is based on the total installed cost of the equipment and a 7% interest

rate2. Direct operating costs such as chemical use and utilities are based on the expected consumption rates.

Suggested operator and maintenance labor hours are listed for each type of emission controls. The costs

of maintenance materials are estimated using cost factors listed for each type of emission controls.

Significant periodic maintenance costs such as replacing baghouse filters are annualized so they can be

incorporated into the annual operating cost.

To determine the total installed cost, the EPA Pollution Control Cost Manual uses the cost factor

method for estimating the installed costs of emission control equipment. In this method, the installed

cost of pollution controls is estimated by multiplying the cost of the emission control equipment by

factors for the major components of a construction project for direct costs such as foundations,

piping, electrical, etc. and for indirect costs such as engineering, construction management,

contingencies, etc. The equipment costs plus the direct and indirect installation costs are summed to

determine the total installed cost of emission controls.

1 US EPA Office of Air Quality Planning and Standards, “EPA Air

Pollution Control Cost Manual”, January 2002, p. 2-7. 2 Ibid, p. 2-13.
From: Barr Engineering Company

Subject: Tilden SO2 Control Cost Analysis

Date: September 28, 2012

Page: 5

The proposed FIP recommends installation of dry FGD SO2 controls for Tilden Line 1. The proposed

FIP indicates that dry SO2 controls are economically feasible because they can be installed at Tilden at a

SO2 control cost effectiveness of $4,500 to $5,500 per ton of SO2 removed. As previously noted, this

estimate does not consider site specific modifications needed to install these controls which can have a

considerable impact on the final installation price. At existing facilities, there can be several physical

barriers to installation of emission controls. Often, there is little space available for new equipment,

clearance between existing equipment is limited and existing plant infrastructure may not have

sufficient capacity to accommodate the new emission control equipment and the associated ancillary

equipment. The EPA control cost manuals do not contain cost factors to specifically address these types

of issues in a detailed manner. The manual explicitly provides for the use of a “retrofit factor” to asses

these costs in a general manner, or costs for site specific requirements such as demolition, buildings and

enclosures, ductwork and other ancillary equipment may be included as line items in the direct

installation cost calculations. Due to the site specific nature of the installations, installed costs were

calculated in the prefeasibility study. Use of the baghouse installation cost factors to determine the

installed cost of ancillary equipment would not properly account for site specific installation costs at the

Tilden plant.

Given the importance of modifications to existing facilities in control cost analysis, it important to

carefully assess these factors when determining how much it will cost to install new emission controls

under these circumstances. Therefore, a prefeasibility engineering analysis was completed to determine

both the cost of site specific modifications and the total installed cost of a dry FGD emission control

system on Tilden Line 1.

3. SO2 Control Cost Analysis for Tilden Line 1

Prefeasibility Engineering Cost Analysis

A common practice in engineering and design work is to develop cost estimates at varying levels of

accuracy throughout the life of a project. Initial cost estimates are prepared at a level of accuracy sufficient

to effectively screen various design options. As the evaluation process continues, more accurate cost

estimates are prepared for the remaining alternatives until a final design basis is selected and the accuracy

of the cost estimate prepared from this information is sufficiently accurate to receive financing for the
From: Barr Engineering Company

Subject: Tilden SO2 Control Cost Analysis

Date: September 28, 2012

Page: 6

project.

One level of cost estimating used to screen project options is a prefeasibility study. The results of a

prefeasibility study are known as “an opinion of probable cost.”3 This cost estimate is prepared based on

site specific equipment locations, equipment and material lists, new equipment design specifications,

information gathered during a site visit, inquiries to suppliers for equipment costs and costs for recent

similar projects. Sufficient engineering and design work is done to assess project costs to an accuracy of

plus or minus 40%. For further information on the requirements of a prefeasibility study, please see report

Appendix B, Explanation of Cost Estimate Classifications. An opinion of probable cost was developed for

installation of dry FGD emission controls on Line 1 at Tilden based on the aforementioned procedures.

Costs for the emission control equipment were provided by Ducon and CFBA supplier. Costs for

materials and equipment outside the dry FGD system (flange to flange control system inlet and outlet) and

overall construction costs were provided by Zachry Engineering Company as part of the prefeasibility

study (Appendix C).

4. Determination of Site Specific Modifications for

Installation of Dry FGD SO2 Controls on Tilden Line 1

In order to prepare a cost estimate for installation of a dry FGD system on Tilden Line 1, a dry FGD

system design and scope of work for site specific modifications to the Tilden plant was needed. This

information was developed by doing the following:  Identify a conceptual design for dry FGD controls based on the Line 1 exhaust gas

characteristics.  Identify induration furnace operational requirements, operating scenarios and process stream

characteristics which could affect the dry FGD system and select dry FGD system design.  Identify ancillary equipment needed for the dry FGD system based on the Line 1 exhaust stream

characteristics.  Identification of a suitable location for the dry FGD system and ancillary equipment  Identification of suitable tie-in locations to Line 1 for routing the exhaust streams to the dry FGD

3 CITE
From: Barr Engineering Company

Subject: Tilden SO2 Control Cost Analysis

Date: September 28, 2012

Page: 7

system.  Identification of potential ductwork routes from the Line 1 exhaust points to the dry FGD system

location

 Identify plant modifications needed to accommodate installation of a dry FGD emission control

system. This includes modifications to Line 1, structural changes to support new ductwork and

changes to Tilden plant’s infrastructure.  Identify site specific constraints at Tilden which could affect the dry FGD construction schedule.

A meeting between Cliffs Natural Resources, Ducon, Zachry Engineering and Barr Engineering was held

at the Tilden plant on September 9, 2012. The purpose of the meeting was to review the characteristics of

the Line 1 exhaust streams, identify how those characteristics would affect the design of the dry FGD

system, identify Line 1 operating conditions which the dry FGD system must meet and to inspect the

Tilden plant site and identify options for installing a dry FGD system equipment on Line 1. The results of

this meeting are discussed in the following sections.

4.1 Design basis for dry FGD controls

Cliffs Natural Resources personnel developed Line 1exhuast stream parameters for the dry FGD system

design from Line 1 heat and material balances and available stack test data. The facility periodically

prepares the heat and material balances from plant operating data to assess the performance of the

induration furnaces. The dry FGD system design parameters reflect Line 1 induration furnace operating

conditions during maximum production rates. A copy of the design specifications submitted to Ducon

and the CFBA supplier is presented in Table 2 below.
From: Barr Engineering Company

Subject: Tilden SO2 Control Cost Analysis

Date: September 28, 2012

Page: 8

Table 2: Assumed Process Parameters for Each Gas Stream

Parameter Value Units

Inlet Gas Flow 595913 acfm

Inlet SO2 in Gas 366 Lb/hr

Inlet Gas Temp Degrees F

Inlet PM to ESP Gr/acf

MWw Lbs/p-mol

Inlet Humidity %

Site elevation above sea level ft

Inlet Static Pressure to Dry

Absorber Reactor

w.g.

4.2 Dry FGD System Conceptual Design

The dry FGD systems for Line 1 proposed by Ducon and CFBA supplier each include two parallel dry

scrubbing vessels and baghouse systems. An air blower with a variable speed motor will be used on each

train, and the exhaust from each blower will be routed to a common stack. Block flow diagrams for the

proposed systems are located in Appendix D.

Taconite induration furnaces are designed with recuperative heat recovery systems to minimize the

amount of fuel use. Air used to cool the finished pellets exiting the induration furnace is used to dry and

preheat the “green ball” pellets entering the furnace. Tilden Line 1 has three exhaust streams. The

exhaust stream exiting the section of the furnace where the green ball pellets enter the furnace has the

lowest operating temperature and highest moisture content of the three streams. Ducon representatives

expressed concerns about the temperature of this stream relative to its water dew point and recommended

that all three exhaust streams be combined to address this issue.
From: Barr Engineering Company

Subject: Tilden SO2 Control Cost Analysis

Date: September 28, 2012

Page: 9

The combined steams represent a total flow rate of 1,000,000 acfm. Ducon representatives indicated that

the combined flow rate resulted in an SDA vessel size too large to provide the required emission control

performance because Ducon’s sorbent injection system design could not adequately disperse the SO2

reagent in a vessel this size. Therefore, two parallel control trains were proposed. Each control train

includes a spray dryer absorber vessel. The combined stream flow rate also exceeds the maximum design flow rate of a CFBA dry FGD and

CFBA supplier has proposed parallel CFBA dry FGD systems as well.

The parallel dry FGD trains are also needed allow the facility operational flexibility needed to operate

the dry FGD systems under the full range of air flow rates expected under the majority of operating

conditions. Dry FGD systems have a limited turn down capacity and operation at less than 50% of the

design air flow rate is not feasible because the reduced air velocity is insufficient to keep the SO2

reagent particles suspended in the air stream. The air velocity in a dry FGD system must be sufficient to

keep the reagent suspended so it can be pneumatically transported from the scrubber to the sorbent

recovery system. In a CFBA system, the air velocity must be sufficient to maintain a fluidized bed of

sorbent particles in the CFBA reactor as well and pneumatically transporting sorbent to the recovery

system. Use of two parallel scrubber vessels allows the facility to take one dry FGD scrubber off line

during low flow conditions so that the air flow rates through the operating dry FGD system are

maintained at the proper levels.

Baghouses were proposed for sorbent recovery and control of spent sorbent particulate emissions. The

baghouses will be sized to allow one baghouse compartment to be taken off line for maintenance while

the remaining compartments are sufficiently sized to meet the facility’s particulate emission control

requirements. This feature is critical because it allows the facility to continue operating if a bag failure

occurs and a compartment must be taken off line to replace a filter bag. Otherwise, Line 1 would be

forced to shut down when baghouse maintenance of this type is required.

One of the emails included in the FIP docket suggested that the cost of SO2 controls at Tilden could be

significantly reduced by utilizing the exiting electrostatic precipitators (ESPs) in a dry FGD system in

lieu of installing new baghouses. This is not feasible for the following reasons:  The existing ESPs are located in close proximity to the Line 1 induration furnace. Air
From: Barr Engineering Company

Subject: Tilden SO2 Control Cost Analysis

Date: September 28, 2012

Page: 10

manifolds on the underside of the furnace collect the furnace exhaust and route the air

directly into the ESPs. There is insufficient space in this area to install new ductwork for

routing the furnace exhaust over to a dry FGD system and back to the ESPs for sorbent

recovery. Removing the existing ESPs and relocating them to the proposed dry FGD plot

space would be inordinately expensive.  The existing ESPs are used to recover iron ore dust from the induration furnace and recycle

the iron ore for reprocessing. If the ESPs were removed for use in the dry FGD system, this

would increase the particulate loading on the dry FGD system and that could adversely affect

the dry FGD system operations. Both suppliers have recommended that the ESPs remain in

their existing service for this reason.  The existing ESPs are also used to remove dust in the furnace exhaust streams to protect the

furnace exhaust fans. Iron ore dust is very abrasive and the exhaust fans could easily be

damaged by iron dust if dust levels are not properly controlled. An exhaust fan failure would

force the shutdown of Line 1 during fan repairs.  If the ESP were to be removed for use in the dry FGD system, iron ore currently recovered in

the ESPs would have to disposed of as solid waste because it would be contaminated with the

spent sorbent from the dry FGD system.

4.3 Ancillary equipment needed for the dry FGD system based on the Line 1

process design and exhaust stream characteristics

 Installation of ductwork from the existing Line 1 stacks (North and South) to the dry FGD

system.  Induced draft fans equipped with variable speed motors at the outlet of each of parallel dry FGD

trains.  A new common exhaust stack and ductwork from the induced draft fans to the stack.
From: Barr Engineering Company

Subject: Tilden SO2 Control Cost Analysis

Date: September 28, 2012

Page: 11  A conveyor system for spent lime removal

 A spent lime storage silo and truck loading facility so spent lime can be transported to a solid

waste disposal facility.  In addition to the electrical system upgrades for the new dry FGD system, there are electrical

system upgrades for the ancillary equipment listed above.

The rationale for ancillary equipment will be discussed in the plant modifications needed to

accommodate installation of a dry FGD emission controls section below.

4.4 Selection of a location for the dry FGD system and ancillary equipment

The proposed site for installation of a dry FGD system for Line 1 is located on the South side of the

building which houses Lines 1 and 2 at Tilden. The proposed location is indicated on the attached aerial

photograph of the Tilden plant (Figure 1). Please note that all figures are located in Appendix D. Figures

6 and 7 are photographs of the south side of the building taken at grade. The space inside the induration

furnace building is limited and not enough area is located inside the building to contain a dry FGD

system. One can see this by the area of the dry FGD plot space indicated in Figure 1 as compared to the

induration furnace building. Therefore, the only available option is to install the dry FGD system on

available open land adjacent to the induration furnace building. The area directly west of the induration

furnaces is occupied by a building which houses the equipment used to prepare the “greenball” feedstock

for the induration furnaces. Rail deliveries are routed through the area on the North side of the building.

Figures 10 and 11 are photographs taken on the North side of the induration furnace building at ground

level. One can see that all open space is taken up with roadways, rail lines and piping. The roadway on

the East and North side of the building is used for truck deliveries and heavy equipment access for

maintenance. Installation of the dry FGD system elevated above the road and rail lines was considered,

but construction of the supports needed to install an FGD system at this location would severely disrupt

the deliveries of supplies needed to operate the plant. Therefore, the South side is the only viable

location for a dry FGD system for Line 1.

4.5 Ductwork route from the Line 1 exhaust points to the dry FGD system

location
From: Barr Engineering Company

Subject: Tilden SO2 Control Cost Analysis

Date: September 28, 2012

Page: 12

Lines 1 and 2 at the Tilden plant run in an east west direction. Line 1 is on the North side of the induration

furnace building and Line 2 is on the south side. As noted in the previous section, the only available site for

a dry FGD system is located on the South side of the induration furnace building. The proposed layout of

the ducting is shown in Figure 1. Figures 2, 3, 4 and 5 are drawings of the induration furnaces. As one can

see the induration furnace structures are very large and take up several stories of space within the building.

The furnace exhaust streams are located at the center of Figures 2 and 3. Figures 8 and 9 are photographs

taken inside the induration furnace building from grade below the Line 1 air blowers. As one can see, the

space is densely packed with existing ducts and there is little room for installation of new ductwork.

Figures 15 and 16 are photographs taken inside the building from the upper level of the building looking

toward s the Line 1 stacks. As one can see, a large duct is directly in the pathway where the ductwork for

Line 1 would be routed. Therefore, the only alternative for ductwork running from Line 1 to the dry FGD

site on the South side of the building is across the top of the building. Figures 12 and 13 are photographs

take on the roof of the Tilden plant. Access to the Line 1 stacks is relatively open and accessible for tieins on the roof. Therefore, installation of tie-ins at this location is not expected to extend beyond the time

normally taken for the annual maintenance outage.

Several factors will make construction of the duct across the top of the building difficult. Most of the

structural steel seen in Figures 8, 9, 14, 15, and 16 designed to for building support and structural steel

below the proposed duct will need to be re-enforced to handle the weight of the ductwork and wind loads

on the duct. Figure 12 is a photo of the roof monitors (ventilators) on the top of the induration furnace

building. Ductwork running across the top of the building will need to be elevated in order to clear these

structures. As previously noted, the area on the North side of the building is where truck and rail

deliveries are made. Therefore, the amount of time construction cranes can be located in this area is

limited and most of the crane lifts of materials for construction of the new duct must be made from the

south side.

Duct construction costs are based on new ductwork being insulated and constructed out of 316 stainless

steel. Under most operating conditions, the insulation will keep the ductwork above acid and water dew

points. However, corrosion due to water and acid condensation may occur during non-normal operating

conditions such as startup and shutdown. Localized corrosion may also occur in areas where insulation

has been removed or damaged over time. Given the remote location of the ductwork, it will be difficult to

inspect it for damage and if problems are identified accessing the duct for repairs will be difficult. To
From: Barr Engineering Company

Subject: Tilden SO2 Control Cost Analysis

Date: September 28, 2012

Page: 13

prevent these problems from occurring, 316 stainless steel was selected as the material of construction for

the new ductwork. The United Taconite plant is currently using 316 steel for induration furnace ducting.

4.6 Duct burners for furnace start up and shutdown

Duct burners are specified as ancillary equipment that would be used during furnace startups and

shutdowns to prevent water condensation in the SDA/ CFBA systems during startups, shutdowns, and

malfunction periods of the furnaces. The burners would be used during periods when furnace off-gas

temperatures are below normal operating temperatures to raise the temperature of the furnace off-gas up to

the normal SDA/CFBA operating temperature.

4.7 Induced draft fans equipped with variable speed motors at the outlet of

each parallel dry FGD train.

As previously noted, the existing ESPs will be used to collect iron ore dust so it can be recycled and

to prevent the furnace exhaust fans from damage by the abrasive iron ore dust particles.

The existing induration furnace exhaust fans will be used to maintain air flows and the operating

pressure of the induration furnace. The existing fans do not have sufficient horsepower to pressure the

induration furnace exhaust through a dry FGD system. Therefore new fans will need to be installed

downstream of each of the two dry FGD emission control trains. The fans will be equipped with

variable speed drives so they can respond to varying operating conditions in the dry FGD systems.

These fans are outside the scope of the emission control equipment vendor’s proposals and must be

accounted for as ancillary equipment.

Installation of two induced draft fans will allow the dry FGD trains to be operated independently. This

will allow the plant to operate on one dry FGD train as necessary during low flow periods. This will also

allow one dry FGD train to remain in service should one of the variable speed fans malfunction.

4.8 A new common exhaust stack and ductwork from the induced draft fans to

the stack

A new common stack is proposed as the exhaust point for the two dry FGD trains. New duct work will be

required to route the dry FGD exhaust streams from the outlet of the induced draft fans to the new stack.

The dry FGD site on the South side of the induration furnace is too far from the exiting Line 1 stack to cost

effectively run ductwork back to the existing stack. A common stack will be more cost effective than
From: Barr Engineering Company

Subject: Tilden SO2 Control Cost Analysis

Date: September 28, 2012

Page: 14

installation of individual stacks. The exhaust gas ductwork and common stack are outside the scope of the

emission control equipment vendor’s proposals and must be accounted for as ancillary equipment.

4.9 A conveyor to transport spent lime collected in the baghouses to a storage

silo, and truck loading facilities at the storage silo to transport spent lime to

a solid waste disposal facility.

The control equipment supplier proposals include facilities for incoming lime shipments, storage and

use within the dry FGD system. The scope of these proposals does not cover the equipment needed to

manage the spent lime generated by the dry FGD system. A conveyor system, storage silo and truck

loading station will be needed to manage the spent lime and to ship it off site to a solid waste disposal

facility for proper disposal.

5. Summary of the Prefeasibility Study Results

The “Dry Flue Gas Desulfurization Study” report in Appendix C contains estimates for the total installed

cost of a dry FGD system and the annual direct operating and maintenance costs. The following costs are

reported for a SDA system installed on Tilden Line 1:  Total Installed Cost - $86,100,000.

 Annual Direct Operation and Maintenance Cost - .$2,870,000 per year

The annual direct operation and maintenance costs were calculated in a manner similar to the methods

described above for the EPA control cost manual. See Appendix C for additional details. The

prefeasibility report did not address indirect operating costs

The total installed cost of emission controls was broken down into:  Costs directly associated with the installation of emission controls

 Costs for site specific modifications and ancillary equipment needed to install an SDA system at

Tilden

Site specific costs for SDA installation at Tilden Line 1 were $26,600,000 or 30% of the total
From: Barr Engineering Company

Subject: Tilden SO2 Control Cost Analysis

Date: September 28, 2012

Page: 15

installed cost.

6. Description of SO2 Control Cost Spreadsheet Tables and

Control Cost Calculation Methods

The SO2 control cost and cost effectiveness calculations are located in Appendix A of this report. The

control cost calculations are presented in 9 tables. The tables contain the following information.

Table # Content

1 Summary of SO2 Emission Control Cost Analysis

2 Utility, Chemical and Supply Costs

3 GSA Installation and operation costs per EPA

Control Cost Manual plus site specific costs per

the 2012 Dry FGD Study Report

4 GSA Installation and operation costs per the

2012 Dry FGD Study Report

5 GSA Installed Cost Table from the 2012 Dry

FGD Study Report

6 O&M Cost Table from the 2012 Dry FGD

Study Report

7 SDA installation and operation costs per EPA

Control Cost Manual plus site specific costs per

the 2012 Dry FGD Study Report

8 SDA Installation and operation costs per the

2012 Dry FGD Study Report

9 SDA Installed Cost Table from the 2012 Dry

FGD Study Report

The total installed costs and operating costs of the dry FGD systems evaluated were calculated using the

procedures specified in US EPA’s Air Pollution Control Cost Manual located at

http://www.epa.gov/ttn/catc/products.html#cccinfo. Dry FGD equipment costs were provided by Ducon

and CFBA supplier. The costs of site specific modifications and ancillary equipment needed to operate

the dry FGD system are based on the 2012 Dry Flue Gas Desulfurization Study prepared by Zachry

Engineering Company and Barr Engineering Company; a copy of this report is located in Appendix C of

this report.
From: Barr Engineering Company

Subject: Tilden SO2 Control Cost Analysis

Date: September 28, 2012

Page: 16

The control cost calculations presented in Appendix A Tables 3 and 7 are based on the cost factors for

installation of a baghouse as found in Table 1.9 page 1-45 and operating costs are based on the operating

cost calculations identified in Section 1.5.of Section 6, Chapter 1 of the control cost manual. The US

EPA’s pollution control cost manual does not include a section which specifically addresses the costs of a

dry FGD system. The baghouse cost factors were chosen for this analysis because baghouses are

significant part of the cost of a dry FGD system. The baghouse pollution control cost calculations also

factor in the periodic cost of filter bag replacement (Section 1.5.1.4), which can be a significant operating

expense. The total capital investment factor for baghouses as presented in table 1.9 is 2.19 times the

purchased equipment cost. One cost of a dry FGD system which is not accounted for in the baghouse

control cost calculations is the cost of the sorbent used to capture the SO2 and other acid gases present in

the exhaust stream. Both of the vendor proposals for dry FGD systems utilize hydrated lime for SO2

capture. Annual hydrated lime use was calculated based on a normal stoichiometric ratio of 1.3 (1.3 moles

of lime per mole of SO2) and the uncontrolled annual SO2 emission rate. Excess hydrated lime must be

added to the dry FGD system to achieve the required level of SO2 control (95% or 5 ppm SO2).

As noted in the introduction to this report, the Tilden Line 1 2006 BART report SO2 baseline emission

rate was used in the SO2 control cost effectiveness calculation.

The control cost analysis in US EPA’s proposed FIP is based on Table 1.3 in the control cost manual

Section 5 Chapter 1, Wet Scrubbers for Acid Gas. The total capital investment factor for wet scrubbers as

presented in table 1.3 is 2.20 times the purchased equipment cost which is nearly identical to the baghouse

cost factor. However, this section of the control cost manual does not include costs for periodic filter bag

replacement. As a result, SO2 control cost calculations in the proposed FIP did not include filter bag

replacement costs and SO2 control costs presented in the FIP underestimate the dry FGD operation.

The 2012 Dry Flue Gas Desulfurization Study report is a prefeasibility engineering report jointly prepared

by Zachry Engineering Company and Barr Engineering Company. The estimated installed cost for

installation of a spray dryer absorber system is presented in Table X of the report and expected operating

costs are presented in Table Y. This information was used to:

A. Independently calculate the SO2 cost effectiveness of dry FGD.
From: Barr Engineering Company

Subject: Tilden SO2 Control Cost Analysis

Date: September 28, 2012

Page: 17

B. Identify the costs of site specific equipment modifications and ancillary equipment installation.

The control cost calculations presented in Appendix A, Tables 4 and 8 use the direct and indirect installed

costs and the operation and maintenance (O&M) costs from the 2012 Dry Flue Gas Desulfurization Study

in the SO2 cost effectiveness calculations. These costs are inserted into the EPA control cost method

worksheets and are used in lieu of the EPA cost factors for installation. O&M costs from the report plus

EPA factors for overhead costs were used to calculate annual operating costs.
Appendix A - SO2 Control Cost Calculations
Michigan Operations - West (Tilden)

Appendix A -SO2 Emission Control Cost Analysis

Table 1 - Summary Information

Capital Costs ($) Annual Costs

($/yr)

Pollution Reduction

(ton/yr) Control Cost ($/ton)

Circulating

Fluidized Bed

Absorber

$ 64,400,000 $ 11,450,000 1000 $ 11,450

Spray Dry

Absorber $ 96,250,000 $ 15,750,000 1000 $ 15,750

Circulating

Fluidized Bed $ 63,100,000 $ 11,650,000 1000 $ 11,650

Spray Dry

Absorber $ 84,550,000 $ 14,500,000 1000 $ 14,550

[a] Calculates the control cost based on the cost of the scrubber, and the cost of the auxiliary equipment associated with the scrubber.

 Site specific retrofit costs from 2012 Dry Flue Gas Desulfurization Study - Opinion of Probable Cost Tables

[b] Calculates control costs based vendor data for the cost of the scrubber and a 60% retrofit factor. No auxiliary equipment is considered.

[c] Control costs based on 2006 BART Report baseline emission rate of 1,153 ton SO2/yr uncontrolled emissions

[d] Project cost from 2012 Dry Flue Gas Desulfurization Study - Opinion of Probable Cost Tables

EPA Method

Independent Review

C:\Users\arm3\AppData\Local\Temp\Tilden Appendix A SO2 Control Costs 09282012_6B01C.xlsx

 Summary
Michigan Operations - West (Tilden)

Appendix A -SO2 Emission Control Cost Analysis

Table 2 - Summary of Utility, Chemical and Supply Costs

Operating Unit: Line 1 Indurating Furnace Study Year 2012 Emission Unit Number EU-KILN1 Stack/Vent Number SVP0051711 (South) and SVP0051981 (North)Reference

Item Unit Cost Units Cost Year Data Source Notes

Baseline Emission Rate Controlled SO2 Emission Rate at 5 ppm SO2 Pollutant tpy tpy

Sulfur Dioxide (SO2 ) 1,153.2 [1] 153.8 [2]

Modified 9/24/2012 Baseline emission rates proposed in the original BART and adopted in the USEPA's RH FIP, proposed 8/15/12. For SO2: tons/yr = 0.42 lb/LT pellets (from test performed 6/23-24/05) x 110 % safety factor x 650 LT pellets/hr x 7,680 hrs/yr / 2,000 lb/ton.

SO2 baseline is also documented in the USEPA Proposed RH FIP, 8/15/12, 77 FR 49325 (back-calculated from Table V-B.35 using the reported control efficiencies). Data used in table above for Baseline SO2 Emission Rate: 650 LT pellets/hr on Kiln #1 (design capacity) 0.42 lb/LT pellets for Kiln #1 (from stack testing)

Assumes that a CFBA and DSA scrubbers can achieve 5 ppm SO2 at the outlet.

tons/yr = 5 ppm SO2 / 1,000,000 ppm x sum(306,000 , 842,000) scf/min x 64.1 lb/lb-mol x 60 min/hr / 385 cf/lb-mol x 7,680 hrs/yr / 2,000 lb/ton

5 ppm SO2 outlet concentration for CFBA or SDA scrubber per EPA Proposed FIP Limit 64.1 SO2 molecular weight 306,000 acfm for North stack 285 F for North stack 216,870 scfm @ 68o F for North stack 842,000 acfm for South stack 300 F for South stack 584,968 scfm @ 68o F for South stack

9/28/2012 Page 2 of 17

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Utility Chem$ Data
Michigan Operations - West (Tilden)

Appendix A -SO2 Emission Control Cost Analysis

Table 3 - GSA - EPA Control Cost Manual Method + Site Specific Costs, 2006 BART Baseline Emission Rate

Operating Unit: Line 1 Indurating Furnace

Emission Unit Number EU-KILN1 Stack/Vent Number North Stack South Stack

Standardized Flow Rate 801,838 scfm @ 68o F

Expected Utilization Rate 100% Temperature Deg F

Expected Annual Hours of Operation 7,680 Hours Moisture Content

Annual Interest Rate 7.0% Actual Flow Rate 1,148,000 acfm

Expected Equipment Life 20 yrs Standardized Flow Rate 801,838 scfm @ 68o F

Dry Std Flow Rate 717,645 dscfm @ 68o F

CONTROL EQUIPMENT COSTS

Capital Costs

 Direct Capital Costs (1)

 Purchased Equipment (A) 13,000,900

 Purchased Equipment Total (B) 21% of control device cost (A) 15,731,089

 Installation - Standard Costs 74% of purchased equip cost (B) 11,641,006

 Installation - Site Specific Costs 30,049,567

 Installation Total 11,641,006

 Total Direct Capital Cost, DC 27,372,095

 Total Indirect Capital Costs, IC 52% of purchased equip cost (B) 8,180,166

Total Capital Investment (TCI) = DC + IC 64,411,580

Operating Costs

 Total Annual Direct Operating Costs Labor, supervision, materials, replacement parts, utilities, etc. 2,701,667

 Total Annual Indirect Operating Costs Sum indirect oper costs + capital recovery cost 8,765,638

Savings from Shutdown of Existing Emission Controls4 0

Total Annual Cost (Annualized Capital Cost + Operating Cost) 11,467,306

Actual

Emission Control Cost Calculation Emissions

Max Emis Annual Cont Eff3 Exit Conc. Cont Emis Reduction Cont Cost

Pollutant lb/hr T/Yr % Conc. Units T/yr T/yr $/Ton Rem

#N/A

Sulfur Dioxide (SO2)2 300.3 1,153.2 95% 5 ppm 153.8 999.4 11,475

Notes & Assumptions

1 Purchased equipment costs from independent review by Zachry Engineering.

2 Capital equipment cost includes the items listed in the "Opinion of Probable Cost" tabs of this spreadsheet.

3 Exit concentration at 95% control efficiency is not technically feasible. The exit concentration at 95% control efficiency is shown below.

1.88 ppm

4 NA - ESPs will continue to operate for iron ore recovery

5 CUECost Workbook Version 1.0, USEPA Document Page 2 allows up to a 60% retrofit factor for installations in existing facilities

6 Site specific installation costs from independent review by Zachry Engineering.

7 Labor required for handling of lime shipments entering and exiting the facility. Includes spil prevention/cleanup and truck cleaning.

8 Determined from Table 1.11 of Chapter 1 of EPA's December 1998 Particulate Matter control design guidelines (for FFs and baghouses)

9 A 10% contingency was used in order to be consistent with the 2012 Dry FGD study. This is a conservative contingency allowance.

CueCost allows use of a 20% contingency factor.

9/28/2012 Page 3 of 17

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CFBA EPA Method
Michigan Operations - West (Tilden)

Appendix A -SO2 Emission Control Cost Analysis

Table 3 - GSA - EPA Control Cost Manual Method + Site Specific Costs, 2006 BART Baseline Emission Rate

CAPITAL COSTS

Direct Capital Costs Combined Stack

Purchased Equipment (A) 1,2 Purchased Equipment Costs (A) 13,000,900

Instrumentation 10% of control device cost (A) 1,300,090

MI Sales Taxes 6% of control device cost (A) 780,054

Freight 5% of control device cost (A) 650,045

Purchased Equipment Total (B) 21% 15,731,089

Installation

Foundations & supports 4% of purchased equip cost (B) 629,244

Handling & erection 50% of purchased equip cost (B) 7,865,545

Electrical 8% of purchased equip cost (B) 1,258,487

Piping 1% of purchased equip cost (B) 157,311

Insulation 7% of purchased equip cost (B) 1,101,176

Painting 4% of purchased equip cost (B) 629,244

Installation Subtotal Standard Expenses 74% 11,641,006

Total Direct Capital Cost, DC 27,372,095

Indirect Capital Costs

Engineering, supervision 10% of purchased equip cost (B) 1,573,109

Construction & field expenses 20% of purchased equip cost (B) 3,146,218

Contractor fees 10% of purchased equip cost (B) 1,573,109

Start-up 1% of purchased equip cost (B) 157,311

Performance test 1% of purchased equip cost (B) 157,311

Model Studies NA of purchased equip cost (B) NA

Contingencies 9 10% of purchased equip cost (B) 1,573,109

Total Indirect Capital Costs, IC 52% of purchased equip cost (B) 8,180,166

Total Capital Investment (TCI) = DC + IC 35,552,261

TCI Adj for Baghouse Filter Replacement 34,362,014

Retrofit multiplier5 0% of TCI 0

Site Specific Installed Equipment Costs 6 Civil/Structural 3,462,500

Mechanical Equipment 15,021,000

Electrical and Control 5,226,000

Freight 735,117

Total Indirect Costs + Contingencies 5,604,950

Total Site Specific Costs 30,049,567

Total Capital Investment (TCI) Retrofit Installed 64,411,580

OPERATING COSTS

Direct Annual Operating Costs, DC

Operating Labor

Operator 115,270

Supervisor 17,291

Maintenance

Maintenance Labor 24,701

Maintenance Materials 24,701

Utilities, Supplies, Replacements & Waste Manageme

Compressed Air $ 400,079

Electricity 1,276,992

Filter Bag Replacement 453,546

Solid Waste Disposal 137,685

Lime 251,403

Total Annual Direct Operating Costs 2,701,667

Savings from Shutdown of Existing Emission Controls.4 0

Indirect Operating Costs

Overhead 109,178

Administration (2% total capital costs) 1,288,232

Property tax (1% total capital costs) 644,116

Insurance (1% total capital costs) 644,116

Capital Recovery 0.0944 for a 20- year equipment life and a 7% interest rate 6,079,998

Total Annual Indirect Operating Costs Sum indirect oper costs + capital recovery cost 8,765,638

Total Annual Cost (Annualized Capital Cost + Operating Cost) 11,467,306

See Summary page for notes and assumptions

9/28/2012 Page 4 of 17

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CFBA EPA Method
Michigan Operations - West (Tilden)

Appendix A -SO2 Emission Control Cost Analysis

Table 3 - GSA - EPA Control Cost Manual Method + Site Specific Costs, 2006 BART Baseline Emission Rate

Capital Recovery Factors

Primary Installation

Interest Rate 7.00%

Equipment Life 20 years

CRF 0.0944

Replacement Catalyst:

Total Installed Cost 0 Zero out if no replacement parts needed

Annualized Cost 0

Replacement Parts & Equipment: Filter Bags and Cages

Total Installed Cost 1,190,248 Zero out if no replacement parts needed

Annualized Cost 453,546

Electrical Use

Reagent Use & Other Operating Costs

Operating Cost Calculations Annual hours of operation: 7,680

Utilization Rate: 100%

Unit Unit of Use Unit of Annual Annual Comments

Item Cost $ Measure Rate Measure Use* Cost

Operating Labor

Op Labor BH + Scrubber 8 61,752

Lime Handling Labor7 53,518

Supervisor 8 17,291

Maintenance

Maint Labor Baghouse8 24,701

Maint Mtls Baghouse8 24,701

Utilities, Supplies, Replacement

Electricity 1,276,992

Water 0

Solid Waste Disposal 137,685

Lime 251,403

Filter Bag Replacement 453,546

Compressed Air $ 400,079

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

See Summary page for notes and assumptions

9/28/2012 Page 5 of 17

C:\Users\arm3\AppData\Local\Temp\Tilden Appendix A SO2 Control Costs 09282012_6B01C.xlsx

CFBA EPA Method
Michigan Operations - West (Tilden)

Appendix A -SO2 Emission Control Cost Analysis

Table 4 - 2012 Dry FGD Study Costs for CFBA Scrubber Including Site Specific Costs, 2006 BART Baseline Emission Rate

Operating Unit: Line 1 Indurating Furnace

Emission Unit Number EU-KILN1 Stack/Vent Number North Stack South Stack

Standardized Flow Rate 801,838 scfm @ 68o F

Expected Utilization Rate 100% Temperature Deg F

Expected Annual Hours of Operation 7,680 Hours Moisture Content

Annual Interest Rate 7.0% Actual Flow Rate 1,148,000 acfm

Expected Equipment Life 20 yrs Standardized Flow Rate 801,838 scfm @ 68o F

Dry Std Flow Rate 717,645 dscfm @ 68o F

CONTROL EQUIPMENT COSTS

Capital Costs

 Direct Capital Costs (1)

 Purchased Equipment (A) 13,000,900

 Purchased Equipment Total (B) 0% of control device cost (A) 0

 Installation - Standard Costs 0% of purchased equip cost (B) 0

 Installation - Site Specific Costs 0

 Installation Total 0

 Total Direct Capital Cost, DC 56,338,228

 Total Indirect Capital Costs, IC 0% of purchased equip cost (B) 6,737,500

Total Capital Investment (TCI) = DC + IC 63,075,728

Operating Costs

 Total Annual Direct Operating Costs Labor, supervision, materials, replacement parts, utilities, etc. 2,866,588

 Total Annual Indirect Operating Costs Sum indirect oper costs + capital recovery cost 8,766,112

 Savings from Shutdown of Existing Emission Controls4 0

Total Annual Cost (Annualized Capital Cost + Operating Cost) 11,632,701

Actual

Emission Control Cost Calculation Emissions

Max Emis Annual Cont Eff3 Exit Conc. Cont Emis Reduction Cont Cost

Pollutant lb/hr T/Yr % Conc. Units T/yr T/yr $/Ton Rem

#N/A

Sulfur Dioxide (SO2)2a 300.3 1,153.2 95% 5 ppm 153.8 999.4 11,640

Notes & Assumptions

1 Installed Cost per 2012 Dry FGD Study Opinion of Probable Cost; includes CFBA and baghouse cost per FL Smidth Proposal 9/15/2012

2 Emission rate assuming 100% natural gas firing, and 100% of sulfur in green balls released as SO2. See "Baseline Emissions" tab for more details.

2a Emission rate from 2006 BART report baseline emission rate. See "Baseline Emissions" tab for more details.

3 Exit concentration at 95% control efficiency is not technically feasible. The exit concentration at 95% control efficiency is shown below.

1.88 ppm

4 NA - ESPs will continue to operate for iron ore recovery

5 CUECost Workbook Version 1.0, USEPA Document Page 2 allows up to a 60% retrofit factor for installations in existing facilities

6 Baghouse filter replacement cost from 2012 Dry FGD Study Option of Probable Cost, O&M cost analysis

9/28/2012 Page 6 of 17

C:\Users\arm3\AppData\Local\Temp\Tilden Appendix A SO2 Control Costs 09282012_6B01C.xlsx

CFBA Independent Review
Michigan Operations - West (Tilden)

Appendix A -SO2 Emission Control Cost Analysis

Table 4 - 2012 Dry FGD Study Costs for CFBA Scrubber Including Site Specific Costs, 2006 BART Baseline Emission Rate

CAPITAL COSTS

Direct Capital Costs Combined Stack

Purchased Equipment (A) 1,2 13,000,900

Purchased Equipment Costs (A)

Instrumentation

MI Sales Taxes

Freight

Purchased Equipment Total (B)

Installation

Foundations & supports

Handling & erection

Electrical

Piping

Insulation

Painting

Installation Subtotal Standard Expenses

Total Direct Capital Cost, DC from Probable Cost Study 56,338,228

Indirect Capital Costs

Engineering, supervision 0

Construction & field expenses 0

Contractor fees 0

Start-up 0

Performance test 0

Model Studies 0

Contingencies 0

Total Indirect Capital Costs, IC from Probable Cost Study 6,737,500

Total Capital Investment (TCI) = DC + IC 63,075,728

TCI Adj for Baghouse Filter Replacement 63,075,728

Retrofit multiplier5 0% of TCI 0

Site Specific Installed Equipment Costs 7

Included in Probable Cost Study Analysis

Total Site Specific Costs

Total Capital Investment (TCI) Retrofit Installed 63,075,728

OPERATING COSTS

Direct Annual Operating Costs, DC

Operating Labor

Operator 107,892

Supervisor 16,184

Maintenance

Maintenance Labor 107,892

Maintenance Materials 250,000

Utilities, Supplies, Replacements & Waste Manageme

Compressed Air $ 224,415

Electricity 933,066

Filter Bag Replacement 367,200

Solid Waste Disposal 303,696

Lime 556,243

Total Annual Direct Operating Costs 2,866,588

Savings from Shutdown of Existing Emission Controls. NA - Continue using ESPs for iron ore recovery 0

Indirect Operating Costs

Overhead 289,181

Administration (2% total capital costs) 1,261,515

Property tax (1% total capital costs) 630,757

Insurance (1% total capital costs) 630,757

Capital Recovery 0.0944 for a 20- year equipment life and a 7% interest rate 5,953,903

Total Annual Indirect Operating Costs Sum indirect oper costs + capital recovery cost 8,766,112

Total Annual Cost (Annualized Capital Cost + Operating Cost) 11,632,701

See Summary page for notes and assumptions

9/28/2012 Page 7 of 17

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CFBA Independent Review
Michigan Operations - West (Tilden)

Appendix A -SO2 Emission Control Cost Analysis

seline Emission Rate Table 4 - 2012 Dry FGD Study Costs for CFBA Scrubber Including Site Specific Costs, 2006 BART Baseline Emission Rate

Capital Recovery Factors

Primary Installation

Interest Rate 7.00%

Equipment Life 20 years

CRF 0.0944

Replacement Catalyst:

Total Installed Cost 0 Zero out if no replacement parts needed

Annualized Cost 0

Replacement Parts & Equipment: Filter Bags and Cages

Total Installed Cost Zero out if no replacement parts needed

Annualized Cost

Electrical Use

Reagent Use & Other Operating Costs

Operating Cost Calculations Annual hours of operation: 7,680

Utilization Rate: 100%

Unit Unit of Use Unit of Annual Annual Comments

Item Cost $ Measure Rate Measure Use* Cost

Operating Labor

Op Labor 107,892

Supervisor 16,184

Maintenance

Maint Labor 107,892

Maint Mtls 250,000

Utilities, Supplies, Replacements & Waste Management

Electricity 933,066

Water 0

Solid Waste Disposal 303,696

Lime 556,243

Filter Bag Replacement 367,200

Water Softner Salt 224,415

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

See Summary page for notes and assumptions

9/28/2012 Page 8 of 17

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CFBA Independent Review
Michigan Operations - West (Tilden)

Appendix A -SO2 Emission Control Cost Analysis

Table 5 - TILDEN GSA/BAGHOUSE FEASIBILITY STUDY

Opinion of Probable Cost - PRELIMINARY

14-Sep-12

Item Material Labor Total Retrofit Cost GSA/SDA

Tilden Retrofit Costs GSA/Baghouse Costs DIRECT COST ITEMS

CIVIL/STRUCTURAL

 Demo Existing Equip. and Building Penetrations $25,000 $125,000 $150,000 100% 0% $150,000 $0

 Structural Modifications $750,000 $1,750,000 $2,500,000 100% 0% $2,500,000 $0

 Misc. Platforms, Support, Access & Enclosures $750,000 $500,000 $1,250,000 40% 60% $500,000 $750,000

 Concrete $600,000 $400,000 $1,000,000 25% 75% $250,000 $750,000

 Rock Anchors $100,000 $150,000 $250,000 25% 75% $62,500 $187,500 Subtotal - Civil Structural $2,225,000 $2,925,000 $5,150,000 $3,462,500 $1,687,500 MECHANICAL

 Demolition $15,000 $85,000 $100,000 100% 0% $100,000 $0

 Lead Paint Abatement $5,000 $45,000 $50,000 100% 0% $50,000 $0

 Line 1 Ductwork $6,200,000 $1,700,000 $7,900,000 100% 0% $7,900,000 $0

 Duct Burner $600,000 $420,000 $1,020,000 100% 0% $1,020,000 $0

 2 GSA/Baghouse Trains $13,000,900 $9,100,630 $22,101,530 0% 100% $0 $22,101,530

 ID Fan $1,350,000 $945,000 $2,295,000 100% 0% $2,295,000 $0

 Stack $775,000 $542,500 $1,317,500 100% 0% $1,317,500 $0

 Ash Handling System $1,025,000 $717,500 $1,742,500 100% 0% $1,742,500 $0

 Water Softener $100,000 $70,000 $170,000 100% 0% $170,000 $0

 Air Compressors $150,000 $45,000 $195,000 0% 100% $0 $195,000

 Compressed Air Piping $15,000 $15,000 $30,000 0% 100% $0 $30,000

 SDA Water Supply Piping $25,000 $25,000 $50,000 0% 100% $0 $50,000

 Lime Slurry Piping $25,000 $25,000 $50,000 0% 100% $0 $50,000

 Natural Gas Piping for Duct Burners $18,000 $18,000 $36,000 100% 0% $36,000 $0

 Fire Protection $10,000 $10,000 $20,000 0% 100% $0 $20,000

 HVAC for ESP, SDA & PJFF Enclosures $75,000 $75,000 $150,000 0% 100% $0 $150,000

 CEMS $325,000 $65,000 $390,000 100% 0% $390,000 $0

 Vendor Support - Service Engineers $0 $500,000 $500,000 0% 100% $0 $500,000

 Miscellaneous Mechanical Equipment $50,000 $50,000 $100,000 0% 100% $0 $100,000 Subtotal - Mechanical $23,763,900 $14,453,630 $38,217,530 $15,021,000 $23,196,530 ELECTRICAL & CONTROLS GSA/SDA 20% percent of total electrical load

 Demolition $0 $25,000 $25,000 100% 0% $25,000 $0

 13800 V Cable, Switchgear, and Circuit Breakers $250,000 $75,000 $325,000 100% 0% $325,000 $0

 Power Distribution Center $2,750,000 $50,000 $2,800,000 80% 20% $2,240,000 $560,000

 7.5 MVA Transformer $600,000 $50,000 $650,000 80% 20% $520,000 $130,000

 480 Volt Transformer $120,000 $30,000 $150,000 80% 20% $120,000 $30,000

 Indoor/Outdoor LightingLighting $25,000 $25,000 $50,000 80% 20% $40,000 $10,000

 Safety Switches & Terminations $25,000 $25,000 $50,000 80% 20% $40,000 $10,000

 Cable Tray and Miscellaneous Conduit $150,000 $250,000 $400,000 80% 20% $320,000 $80,000

 Power Distribution & Instrument Cable $500,000 $825,000 $1,325,000 80% 20% $1,060,000 $265,000

 Gounding System $25,000 $25,000 $50,000 80% 20% $40,000 $10,000

 Medium Voltage Emergency Generator Rental $50,000 $0 $50,000 80% 20% $40,000 $10,000

 Control System Hardware & Panels $300,000 $100,000 $400,000 80% 20% $320,000 $80,000

 Field Devices $100,000 $50,000 $150,000 80% 20% $120,000 $30,000

 Fiber Optic Cable $5,000 $15,000 $20,000 80% 20% $16,000 $4,000 Subtotal - Electrical & Controls $4,900,000 $1,545,000 $6,445,000 $5,226,000 $1,219,000

 Subtotal of Above $30,888,900 $18,923,630 $49,812,530 $23,709,500 $26,103,030

 Freight $1,544,445 $0 $1,544,445 $735,117 $809,328

Direct Cost Contingency $3,088,890 $1,892,363 $4,981,253 $2,370,950 $2,610,303

 Total Direct Costs $35,522,235 $20,815,993 $56,338,228 $26,815,567 $29,522,661

INDIRECT COST ITEMS

48% 52%

 Performance Bonds, All Contracts - not required. $0 $0 $0 48% 52% $0 $0

 Sales Tax, All Materials $0 $0 $0 48% 52% $0 $0

 Engineering - Design $0 $4,000,000 $4,000,000 48% 52% $1,920,000 $2,080,000

 Construction Management Services $0 $1,200,000 $1,200,000 48% 52% $576,000 $624,000

 Startup and Commissioning Services $0 $400,000 $400,000 48% 52% $192,000 $208,000

 Construction Testing Services $0 $200,000 $200,000 48% 52% $96,000 $104,000

 Soil Borings $0 $150,000 $150,000 48% 52% $72,000 $78,000

 Emission Testing $0 $75,000 $75,000 48% 52% $36,000 $39,000

 Owner's Finance Cost $0 $0 $0 0% 100% $0 $0

 Owner's Staff Time $0 $0 $0 48% 52% $0 $0

 Startup Materials, EG, lime $100,000 $0 $100,000 48% 52% $48,000 $52,000 Subtotal Above $100,000 $6,025,000 $6,125,000 $2,940,000 $3,185,000

 Indirect Cost Contingency $10,000 $602,500 $612,500 $294,000 $318,500

 Total Indirect Cost $110,000 $6,627,500 $6,737,500 $3,234,000 $3,503,500

Grand Total Opinion of Probable Cost $35,632,235 $27,443,493 $63,075,728 $30,049,567 $33,026,161

NOTE: O&M inputs provided separately

9
Michigan Operations - West (Tilden)

Appendix A -SO2 Emission Control Cost Analysis

Table 6 - TILDEN CFBA/BAGHOUSE FEASIBILITY STUDY

Direct Annual Operating & Maintenance Costs (Preliminary)

Operations: Hours

 Operator Cost $ 107,892

 Operator Supervisor Cost $ 16,184

Maintenance:

 Maintenance Hours $ 107,892

 Maintenance Materials $ 250,000

Utilities, Supplies, Replacement & Waste Disposal:

 Compressed Air Included

 Electricity $ 933,066

 Filter Bag & Cage Replacement

$ 367,200

 Solid Waste Disposal $ 303,696

 Lime $ 556,243

 Softener Salt

$ 224,415

Total Direct Annual Operating & Maintenance Costs (Preliminary) $ 2,866,588

TILDEN SDA/BAGHOUSE O&M COST ESTIMATES

C:\Users\arm3\AppData\Local\Temp\Tilden Appendix A SO2 Control Costs 09282012_6B01C.xlsx

O&M Costs
Michigan Operations - West (Tilden)

Appendix A -SO2 Emission Control Cost Analysis

Table 7 -SDA - EPA Control Cost Manual Method + Site Specific Costs, 2006 BART Baseline Emission Rate

Operating Unit: Line 1 Indurating Furnace

Emission Unit Number EU-KILN1 Stack/Vent Number North Stack South Stack

Standardized Flow Rate 801,838 scfm @ 68o F

Expected Utilization Rate 100% Temperature Deg F

Expected Annual Hours of Operation 7,680 Hours Moisture Content

Annual Interest Rate 7.0% Actual Flow Rate 1,148,000 acfm

Expected Equipment Life 20 yrs Standardized Flow Rate 801,838 scfm @ 68o F

Dry Std Flow Rate 717,645 dscfm @ 68o F

CONTROL EQUIPMENT COSTS

Capital Costs

 Direct Capital Costs (1)

 Purchased Equipment (A) 25,000,000

 Purchased Equipment Total (B) 21% of control device cost (A) 30,250,000

 Installation - Standard Costs 74% of purchased equip cost (B) 22,385,000

 Installation - Site Specific Costs 29,095,341

 Installation Total 22,385,000

 Total Direct Capital Cost, DC 52,635,000

 Total Indirect Capital Costs, IC 52% of purchased equip cost (B) 15,730,000

Total Capital Investment (TCI) = DC + IC 96,270,093

Operating Costs

 Total Annual Direct Operating Costs Labor, supervision, materials, replacement parts, utilities, etc. 2,701,667

 Total Annual Indirect Operating Costs Sum indirect oper costs + capital recovery cost 13,047,197

 Savings from Shutdown of Existing Emission Controls4 0

Total Annual Cost (Annualized Capital Cost + Operating Cost) 15,748,864

Actual

Emission Control Cost Calculation Emissions

Max Emis Annual Cont Eff Exit Conc. Cont Emis Reduction Cont Cost

Pollutant lb/hr T/Yr % Conc. Units T/yr T/yr $/Ton Rem

#N/A

Sulfur Dioxide (SO2)2 300.3 1,153.2 90% 5 ppm 153.8 999.4 15,759

Notes & Assumptions

1 SDA and baghouse cost per Ducon Proposal 9/20/2012, Site Specific Installed Cost per Installed Cost per Barr/Zachry Dry FGD Study Opinion of Probable Cost

2 Emission rate from 2006 BART report baseline emission rate. See "Baseline Emissions" tab for more details.

3 Controlled emission is the greater of the emission rate at 90% control (vendor proposal) or 5 ppm (EPA proposed FIP limit)

Exit Concentration at 90% Control 4 ppm

4 NA - ESPs will continue to operate for iron ore recovery

5 CUECost Workbook Version 1.0, USEPA Document Page 2 allows up to a 60% retrofit factor for installations in existing facilities

6 Site specific installation costs from independent review by Zachry Engineering.

7 Labor required for handling of lime shipments entering and exiting the facility. Includes spil prevention/cleanup and truck cleaning.

8 Determined from Table 1.11 of Chapter 1 of EPA's December 1998 Particulate Matter control design guidelines (for FFs and baghouses)

9 A 10% contingency was used in order to be consistent with the 2012 Dry FGD study. This is a conservative contingency allowance.

CueCost allows use of a 20% contingency factor.

9/28/2012 Page 11 of 17

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SDA EPA Method
Michigan Operations - West (Tilden)

Appendix A -SO2 Emission Control Cost Analysis

Table 7 -SDA - EPA Control Cost Manual Method + Site Specific Costs, 2006 BART Baseline Emission Rate

CAPITAL COSTS

Direct Capital Costs Combined Stack

Purchased Equipment (A) 1,2 Purchased Equipment Costs (A) 25,000,000

Instrumentation 10% of control device cost (A) 2,500,000

MI Sales Taxes 6% of control device cost (A) 1,500,000

Freight 5% of control device cost (A) 1,250,000

Purchased Equipment Total (B) 21% 30,250,000

Installation

Foundations & supports 4% of purchased equip cost (B) 1,210,000

Handling & erection 50% of purchased equip cost (B) 15,125,000

Electrical 8% of purchased equip cost (B) 2,420,000

Piping 1% of purchased equip cost (B) 302,500

Insulation 7% of purchased equip cost (B) 2,117,500

Painting 4% of purchased equip cost (B) 1,210,000

Installation Subtotal Standard Expenses 74% 22,385,000

Total Direct Capital Cost, DC 52,635,000

Indirect Capital Costs

Engineering, supervision 10% of purchased equip cost (B) 3,025,000

Construction & field expenses 20% of purchased equip cost (B) 6,050,000

Contractor fees 10% of purchased equip cost (B) 3,025,000

Start-up 1% of purchased equip cost (B) 302,500

Performance test 1% of purchased equip cost (B) 302,500

Model Studies NA of purchased equip cost (B) NA

Contingencies 9 10% of purchased equip cost (B) 3,025,000

Total Indirect Capital Costs, IC 52% of purchased equip cost (B) 15,730,000

Total Capital Investment (TCI) = DC + IC 68,365,000

TCI Adj for Baghouse Filter Replacement 67,174,752

Retrofit multiplier5 0% of TCI 0

Site Specific Installed Equipment Costs 6 Civil/Structural 3,462,500

Mechanical Equipment 15,021,000

Electrical and Control 5,226,000

Freight 724,141

Total Indirect Costs + Contingencies 4,661,700

Total Site Specific Costs 29,095,341

Total Capital Investment (TCI) Retrofit Installed 96,270,093

OPERATING COSTS

Direct Annual Operating Costs, DC

Operating Labor

Operator 115,270

Supervisor 17,291

Maintenance

Maintenance Labor 24,701

Maintenance Materials 24,701

Utilities, Supplies, Replacements & Waste Manage

Compressed Air $ 400,079

Electricity 1,276,992

Filter Bag Replacement 453,546

Solid Waste Disposal 137,685

Lime 251,403

Total Annual Direct Operating Costs 2,701,667

Savings from Shutdown of Existing Emission Controls. NA - Continue using ESPs for iron ore recovery 0

Indirect Operating Costs

Overhead 109,178

Administration (2% total capital costs) 1,925,402

Property tax (1% total capital costs) 962,701

Insurance (1% total capital costs) 962,701

Capital Recovery 0.0944 for a 20- year equipment life and a 7% interest rate 9,087,216

Total Annual Indirect Operating Costs Sum indirect oper costs + capital recovery cost 13,047,197

Total Annual Cost (Annualized Capital Cost + Operating Cost) 15,748,864

See Summary page for notes and assumptions

9/28/2012 Page 12 of 17

C:\Users\arm3\AppData\Local\Temp\Tilden Appendix A SO2 Control Costs 09282012_6B01C.xlsx

SDA EPA Method
Michigan Operations - West (Tilden)

Appendix A -SO2 Emission Control Cost Analysis

Table 7 -SDA - EPA Control Cost Manual Method + Site Specific Costs, 2006 BART Baseline Emission Rate

Capital Recovery Factors

Primary Installation

Interest Rate 7.00%

Equipment Life 20 years

CRF 0.0944

Replacement Catalyst:

Total Installed Cost

Annualized Cost 0

Replacement Parts & Equipment: Filter Bags and Cages

Total Installed Cost 1,190,248 Zero out if no replacement parts needed

Annualized Cost 453,546

Electrical Use

Reagent Use & Other Operating Costs

Operating Cost Calculations Annual hours of operation: 7,680

Utilization Rate: 100%

Unit Unit of Use Unit of Annual Annual Comments

Item Cost $ Measure Rate Measure Use* Cost

Operating Labor

Op Labor BH + Scrubber 8 61,752

Lime Handling Labor7 53,518

Supervisor 8 17,291

Maintenance

Maint Labor Baghouse8 24,701

Maint Mtls Baghouse8 24,701

Utilities, Supplies, Replacem

Electricity 1,276,992

Water 0

Solid Waste Disposal 137,685

Lime 251,403

Filter Bag Replacement 453,546

Compressed Air $ 400,079

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

See Summary page for notes and assumptions

9/28/2012 Page 13 of 17

C:\Users\arm3\AppData\Local\Temp\Tilden Appendix A SO2 Control Costs 09282012_6B01C.xlsx

SDA EPA Method
Michigan Operations - West (Tilden)

Appendix A -SO2 Emission Control Cost Analysis

Table 8 - 2012 Dry FGD Study Costs for SDA Scrubber Including Site Specific Costs, 2006 BART Baseline Emission Rate

Operating Unit: Line 1 Indurating Furnace

Emission Unit Number EU-KILN1 Stack/Vent Number North Stack South Stack

Standardized Flow Rate 801,838 scfm @ 68o F

Expected Utilization Rate 100% Temperature Deg F

Expected Annual Hours of Operation 7,680 Hours Moisture Content

Annual Interest Rate 7.0% Actual Flow Rate 1,148,000 acfm

Expected Equipment Life 20 yrs Standardized Flow Rate 801,838 scfm @ 68o F

Dry Std Flow Rate 717,645 dscfm @ 68o F

CONTROL EQUIPMENT COSTS

Capital Costs

 Direct Capital Costs (1)

 Purchased Equipment (A) 25,000,000

 Purchased Equipment Total (B) 0% of control device cost (A) 0

 Installation - Standard Costs 0% of purchased equip cost (B) 0

 Installation - Site Specific Costs 0

 Installation Total 0

 Total Direct Capital Cost, DC 79,376,500

 Total Indirect Capital Costs, IC 0% of purchased equip cost (B) 6,737,500

Total Capital Investment (TCI) = DC + IC 84,540,985

Operating Costs

 Total Annual Direct Operating Costs Labor, supervision, materials, replacement parts, utilities, etc. 2,866,588

 Total Annual Indirect Operating Costs Sum indirect oper costs + capital recovery cost 11,650,891

 Savings from Shutdown of Existing Emission Controls4 0

Total Annual Cost (Annualized Capital Cost + Operating Cost) 14,517,479

Actual

Emission Control Cost Calculation Emissions

Max Emis Annual Cont Eff Exit Conc. Cont Emis Reduction Cont Cost

Pollutant lb/hr T/Yr % Conc. Units T/yr T/yr $/Ton Rem

#N/A

Sulfur Dioxide (SO2)2a 300.3 1,153.2 90% 5 ppm 153.8 999.4 14,527

Notes & Assumptions

1 Installed Cost per Barr/Zachry Dry FGD Study Opinion of Probable Cost; includes SDA and baghouse cost per Ducon Proposal 9/20/2012

2 Emission rate assuming 100% natural gas firing, and 100% of sulfur in green balls released as SO2. See "Baseline Emissions" tab for more details.

2a Emission rate from 2006 BART report baseline emission rate. See "Baseline Emissions" tab for more details.

3 Controlled emission is the greater of the emission rate at 90% control (vendor proposal) or 5 ppm (EPA proposed FIP limit)

Exit Concentration at 90% Control 4 ppm per note 2 4 ppm per note 2a

4 NA - ESPs will continue to operate for iron ore recovery

5 CUECost Workbook Version 1.0, USEPA Document Page 2 allows up to a 60% retrofit factor for installations in existing facilities

6 Baghouse filter replacement cost from CFBA estimate from Essar Steel BACT report hood exhuast control cost analysis; CFBA design basis of 1,207,266 acfm.

9/28/2012 Page 14 of 17

C:\Users\arm3\AppData\Local\Temp\Tilden Appendix A SO2 Control Costs 09282012_6B01C.xlsx

SDA Independent Review
Michigan Operations - West (Tilden)

Appendix A -SO2 Emission Control Cost Analysis

Table 8 - 2012 Dry FGD Study Costs for SDA Scrubber Including Site Specific Costs, 2006 BART Baseline Emission Rate

CAPITAL COSTS

Direct Capital Costs Combined Stack

Purchased Equipment (A) 1,2 25,000,000

Purchased Equipment Costs (A)

Instrumentation

MI Sales Taxes

Freight

Purchased Equipment Total (B)

Installation

Foundations & supports

Handling & erection

Electrical

Piping

Insulation

Painting

Installation Subtotal Standard Expenses

Total Direct Capital Cost, DC from Probable Cost Study 79,376,500

Indirect Capital Costs

Engineering, supervision 0

Construction & field expenses 0

Contractor fees 0

Start-up 0

Performance test 0

Model Studies 0

Contingencies 0

Total Indirect Capital Costs, IC from Probable Cost Study 6,737,500

Total Capital Investment (TCI) = DC + IC 86,114,000

TCI Adj for Baghouse Filter Replacement 84,540,985

Retrofit multiplier5 0% of TCI 0

Site Specific Installed Equipment Costs 7

Included in Probable Cost Study Analysis

Total Site Specific Costs

Total Capital Investment (TCI) Retrofit Installed 84,540,985

OPERATING COSTS

Direct Annual Operating Costs, DC

Operating Labor

Operator 107,892

Supervisor 16,184

Maintenance

Maintenance Labor 107,892

Maintenance Materials 250,000

Utilities, Supplies, Replacements & Waste Manageme

Compressed Air $ 224,415

Electricity 933,066

Filter Bag Replacement 367,200

Solid Waste Disposal 303,696

Lime 556,243

Total Annual Direct Operating Costs 2,866,588

Savings from Shutdown of Existing Emission Controls. NA - Continue using ESPs for iron ore recovery 0

Indirect Operating Costs

Overhead 289,181

Administration (2% total capital costs) 1,690,820

Property tax (1% total capital costs) 845,410

Insurance (1% total capital costs) 845,410

Capital Recovery 0.0944 for a 20- year equipment life and a 7% interest rate 7,980,071

Total Annual Indirect Operating Costs Sum indirect oper costs + capital recovery cost 11,650,891

Total Annual Cost (Annualized Capital Cost + Operating Cost) 14,517,479

See Summary page for notes and assumptions

9/28/2012 Page 15 of 17

C:\Users\arm3\AppData\Local\Temp\Tilden Appendix A SO2 Control Costs 09282012_6B01C.xlsx

SDA Independent Review
Michigan Operations - West (Tilden)

Appendix A -SO2 Emission Control Cost Analysis

Table 8 - 2012 Dry FGD Study Costs for SDA Scrubber Including Site Specific Costs, 2006 BART Baseline Emission Rate

Capital Recovery Factors

Primary Installation

Interest Rate 7.00%

Equipment Life 20 years

CRF 0.0944

Replacement Catalyst:

Total Installed Cost 0 Zero out if no replacement parts needed

Annualized Cost 0

Replacement Parts & Equipment: Filter Bags and Cages

Total Installed Cost

Annualized Cost 599,400

Electrical Use

Reagent Use & Other Operating Costs

Operating Cost Calculations Annual hours of operation: 7,680

Utilization Rate: 100%

Unit Unit of Use Unit of Annual Annual Comments

Item Cost $ Measure Rate Measure Use* Cost

Operating Labor

Op Labor 107,892

Supervisor 16,184

Maintenance

Maint Labor 107,892

Maint Mtls 250,000

Utilities, Supplies, Replacemen

Electricity 933,066

Water 0

Solid Waste Disposal 303,696

Lime 556,243

Filter Bag Replacement 367,200

Compressed Air $ 224,415

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

See Summary page for notes and assumptions

9/28/2012 Page 16 of 17

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SDA Independent Review
Michigan Operations - West (Tilden)

Appendix A -SO2 Emission Control Cost Analysis

Table 9 TILDEN SDA/BAGHOUSE FEASIBILITY STUDY

Opinion of Probable Cost - PRELIMINARY

Item Material Labor Total

Retrofit

Cost CFBA/SDA Tilden RetrofitCosts

SDA/Baghouse

Costs

DIRECT COST ITEMS

CIVIL/STRUCTURAL

 Demo Existing Equip. and Building Penetrations $25,000 $125,000 $150,000 100% 0% $150,000 $0

 Structural Modifications $750,000 $1,750,000 $2,500,000 100% 0% $2,500,000 $0

 Misc. Platforms, Support, Access & Enclosures $750,000 $500,000 $1,250,000 40% 60% $500,000 $750,000

 Concrete $600,000 $400,000 $1,000,000 25% 75% $250,000 $750,000

 Rock Anchors $100,000 $150,000 $250,000 25% 75% $62,500 $187,500

Subtotal - Civil Structural $2,225,000 $2,925,000 $5,150,000 $3,462,500 $1,687,500

MECHANICAL

 Demolition $15,000 $85,000 $100,000 100% 0% $100,000 $0

 Lead Paint Abatement $5,000 $45,000 $50,000 100% 0% $50,000 $0

 Line 1 Ductwork $6,200,000 $1,700,000 $7,900,000 100% 0% $7,900,000 $0

 Duct Burner $600,000 $420,000 $1,020,000 100% 0% $1,020,000 $0

 2 SDA/Baghouse Trains $25,000,000 $17,500,000 $42,500,000 0% 100% $0 $42,500,000

 ID Fan $1,350,000 $945,000 $2,295,000 100% 0% $2,295,000 $0

 Stack $775,000 $542,500 $1,317,500 100% 0% $1,317,500 $0

 Ash Handling System $1,025,000 $717,500 $1,742,500 100% 0% $1,742,500 $0

 Water Softener $100,000 $70,000 $170,000 100% 0% $170,000 $0

 Air Compressors $150,000 $45,000 $195,000 0% 100% $0 $195,000

 Compressed Air Piping $15,000 $15,000 $30,000 0% 100% $0 $30,000

 SDA Water Supply Piping $25,000 $25,000 $50,000 0% 100% $0 $50,000

 Lime Slurry Piping $25,000 $25,000 $50,000 0% 100% $0 $50,000

 Natural Gas Piping for Duct Burners $18,000 $18,000 $36,000 100% 0% $36,000 $0

 Fire Protection $10,000 $10,000 $20,000 0% 100% $0 $20,000

 HVAC for ESP, SDA & PJFF Enclosures $75,000 $75,000 $150,000 0% 100% $0 $150,000

 CEMS $325,000 $65,000 $390,000 100% 0% $390,000 $0

 Vendor Support - Service Engineers $0 $500,000 $500,000 0% 100% $0 $500,000

 Miscellaneous Mechanical Equipment $50,000 $50,000 $100,000 0% 100% $0 $100,000

Subtotal - Mechanical $35,763,000 $22,853,000 $58,616,000 $15,021,000 $43,595,000

ELECTRICAL & CONTROLS CFBA/SDA 20% percent of total electrical load

 Demolition $0 $25,000 $25,000 100% 0% $25,000 $0

 13800 V Cable, Switchgear, and Circuit Breakers $250,000 $75,000 $325,000 100% 0% $325,000 $0

 Power Distribution Center $2,750,000 $50,000 $2,800,000 80% 20% $2,240,000 $560,000

 7.5 MVA Transformer $600,000 $50,000 $650,000 80% 20% $520,000 $130,000

 480 Volt Transformer $120,000 $30,000 $150,000 80% 20% $120,000 $30,000

 Indoor/Outdoor LightingLighting $25,000 $25,000 $50,000 80% 20% $40,000 $10,000

 Safety Switches & Terminations $25,000 $25,000 $50,000 80% 20% $40,000 $10,000

 Cable Tray and Miscellaneous Conduit $150,000 $250,000 $400,000 80% 20% $320,000 $80,000

 Power Distribution & Instrument Cable $500,000 $825,000 $1,325,000 80% 20% $1,060,000 $265,000

 Gounding System $25,000 $25,000 $50,000 80% 20% $40,000 $10,000

 Medium Voltage Emergency Generator Rental $50,000 $0 $50,000 80% 20% $40,000 $10,000

 Control System Hardware & Panels $300,000 $100,000 $400,000 80% 20% $320,000 $80,000

 Field Devices $100,000 $50,000 $150,000 80% 20% $120,000 $30,000

 Fiber Optic Cable $5,000 $15,000 $20,000 80% 20% $16,000 $4,000

Subtotal - Electrical & Controls $4,900,000 $1,545,000 $6,445,000 $5,226,000 $1,219,000

 Subtotal of Above $42,888,000 $27,323,000 $70,211,000 $23,709,500 $46,501,500

 Freight $2,144,400 $0 $2,144,400 $724,141 $1,420,259

Direct Cost Contingency $4,288,800 $2,732,300 $7,021,100 $2,370,950 $4,650,150

 Total Direct Costs $49,321,200 $30,055,300 $79,376,500 $26,804,591 $52,571,909

INDIRECT COST ITEMS

34% 66%

 Performance Bonds, All Contracts - not required. $0 $0 $0 34% 66% $0 $0

 Sales Tax, All Materials $0 $0 $0 34% 66% $0 $0

 Engineering - Design $0 $4,000,000 $4,000,000 34% 66% $1,360,000 $2,640,000

 Construction Management Services $0 $1,200,000 $1,200,000 34% 66% $408,000 $792,000

 Startup and Commissioning Services $0 $400,000 $400,000 34% 66% $136,000 $264,000

 Construction Testing Services $0 $200,000 $200,000 34% 66% $68,000 $132,000

 Soil Borings $0 $150,000 $150,000 34% 66% $51,000 $99,000

 Emission Testing $0 $75,000 $75,000 34% 66% $25,500 $49,500

 Owner's Finance Cost $0 $0 $0 0% 100% $0 $0

 Owner's Staff Time $0 $0 $0 34% 66% $0 $0

 Startup Materials, EG, lime $100,000 $0 $100,000 34% 66% $34,000 $66,000

Subtotal Above $100,000 $6,025,000 $6,125,000 $2,082,500 $4,042,500

 Indirect Cost Contingency $10,000 $602,500 $612,500 $208,250 $404,250

 Total Indirect Cost $110,000 $6,627,500 $6,737,500 $2,290,750 $4,446,750

Grand Total Opinion of Probable Cost $49,431,200 $36,682,800 $86,114,000 $29,095,341 $57,018,659

NOTE: O&M inputs provided separately

17
Appendix B – Explanation of Cost Estimate Classifications
Quantification of Engineer’s Opinion of Probable Cost Estimate Process

The pollution abate cost estimate process followed several standard steps in developing the cost estimate;

1. Process design parameters were developed for such items as flue gas flow, flue gas

composition, and current emissions profile.

2. This data was sent to two vendors and information was received back from the vendors for

equipment cost, erection cost, required footprint, and expected emissions performance.

3. Zachary and Barr conducted site inspections for UTAC and Tilden. Major items evaluated were

the available footprint, interconnections to existing systems and routes for the new ductwork.

4. Working with the vendor supplied information, Zachry then developed a site layout concept.

5. Concepts were developed for the interties to the existing plant systems and duct runs

were developed to connect the existing systems to the new systems.

6. From this information, Zachry developed total cost estimates for Utac and Tilden.

Tilden Estimate Type

The table below provides a chart describing the different classifications of cost estimates starting with the

least precise and ending with the most precise.

The cost estimate developed for this project does not fall exactly into one of these classifications. For the

purposes of this analysis the capital cost estimate is divided into two classifications:

1. Vendor supplied cost for equipment and erection of that equipment

2. Balance of plant systems estimated by Zachry

The cost estimate for the Vendor Supplied Equipment corresponds to a Class 2 estimate class. This

estimate classification is characterized by a fairly high level of project definition. For instance, many of

the design parameters for the pollution control devices are already known and the vendors have their

internal data base of comparable projects from which to develop their cost basis. A Class 2 has an end
use for developing a preliminary estimate as opposed to a screening or feasibility estimate with an

accuracy range of +20% to -10%

The cost estimate for the Balance of Plant Systems corresponds to a Class 4 estimate class (American

Association of Cost Engineering International Recommended Practice No. 18R-97) for the process

industries. This estimate classification is characterized by limited project definition and the use of

comparable projects, scaling and industry experience to calculate costs. A Class 4 has an end use for

concept or feasibility studies, with an accuracy range of +50% to -25%. These parameters for a Class 4

estimate are shown table below.

AACE Generic Cost Estimate Classification Matrix

Primary

Characteristic Secondary Characteristics

Level of Project

Definition

End Usage Methodology Accuracy

Range

Preparation

Effort

Estimate

class

Expressed as % of

complete project

definition

Typical purpose

of estimate

Typical

estimating

method

Typical

+/- range

relative to

best range

index of

1[a]

Typical

degree of

effort relative

to least cost

index of 1[b]

Class 5 0% to 2% Screening or

feasibility

Stochastic or

judgment

10 to 20 1

Class 4 1% to 5% Concept study or

feasibility

Primarily

stochastic

5 to 10 2 to 4

Class 3 10% to 40% Budget,

authorization or

Mixed but

primarily

3 to 6 3 to 10
control stochastic

Class 2 30% to 60% Preliminary

estimate

Primarily

deterministic

2 to 3 5 to 20

Class 1 50% to 100% Check estimate

or engineer’s

estimate

Deterministic 1 10 to 100

Notes:

[a] If the range index value of “1” represents +10/-5%, then an index value of 10 represents +100/-50%.

[b] If the cost index value of “1” represents 0.005% of project cost, then an index value of 100 represents

0.5% of project cost.

The overall accuracy of the cost estimate will be somewhere between a Class 4 and Class 2 estimate.

Approximately 50% of the cost equipment and materials for the project is in the Balance of Plant

Systems and approximately 50% of the cost of the project is in the Vendor Supplied information. This

allows the overall accuracy to be found by taking the arithmetic average of the Class 4 and the Class 2

estimate class. This leads to an accuracy of +35% to -17.5%. Zachry has independently assessed the

accuracy as +40%.

Qualification of Estimated Cost

The feasibility-level construction cost estimate provided in this report is made on the basis of

Barr/Zachary’s (Engineers) combined experience and qualifications and represents our best judgment as

experienced and qualified professionals familiar with the project. This opinion is based on project-related

information available to the Engineer at this time, current information about probable future costs, and a

concept-level design of the project. The opinion of construction cost will likely change as more

information becomes available and further design is completed. In addition, because we have no control

over the eventual cost of labor, materials, equipment, or services furnished by others; the contractor’s

methods of determining prices; competitive bidding; or market conditions, the Engineers’ cannot and do
not guarantee that proposals, bids, or actual construction costs will not vary from the opinion of probable

construction cost presented in this report. Greater assurance as to the probable construction cost can be

achieved through additional design to provide more complete project definition.
Appendix C – Dry Flue Gas Desulfurization Study
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DESULFURIZATION STUDY

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Copyright © 2011, Zachry Engineering Corporation 

All Rights Reserved

TABLE OF CONTENTS 

SECTION 1 – EXECUTIVE SUMMARY ..................................................................... 3

1.1 Major Equipment List ......................................................................................... 3

1.2 Opinion of Probable Cost.................................................................................... 3

1.3 Milestone Schedule ............................................................................................. 3

1.4 Drawings ............................................................................................................. 3

SECTION 2 – MAJOR EQUIPMENT LIST ................................................................. 5

2.1 United Taconite Facility (Forbes, MN) .............................................................. 5

2.2 Tilden Taconite Facility (Ishpeming, MI) .......................................................... 6

SECTION 3 – OPINION OF PROBABLE COST......................................................... 8

3.1 Financial Assumptions: ....................................................................................... 8

3.2 Site Layout, Scope Assumptions: ....................................................................... 9

3.3 Project/Design Assumptions: .............................................................................. 9

3.4 Circulating Fluidized Bed Absorber (CFBA) Based System ........................... 10

SECTION 4 – MILESTONE SCHEDULE .................................................................. 18

SECTION 5 – DRAWINGS ........................................................................................... 22

A014562-RPTS001 RB 2 of 28
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Copyright © 2011, Zachry Engineering Corporation 

All Rights Reserved

SECTION 1 – EXECUTIVE SUMMARY 

Barr Engineering Company (Barr) and Zachry Engineering Corporation (Zachry) 

developed an opinion of probable cost and preliminary construction milestone schedule 

in response to Cliffs Natural Resources (CliffsNR) request for a dry flue gas 

desulfurization control equipment study. The project includes the supply and installation 

of electrostatic precipitators (ESPs), flue gas desulfurization (FGD) equipment, 

baghouses and associated equipment to reduce particulate matter (PM) and sulfur dioxide 

(SO2) emissions at the United Taconite (UTAC) facility Lines 1 and 2 in Forbes, 

Minnesota and at the Tilden Taconite (Tilden) facility Line 1 in Ishpeming, MI. The two 

types of FGD technologies considered for this project included spray dryer absorbers 

(SDAs) and circulating fluidized bed absorbers (CFBAs). This report is based primarily 

on the use of SDAs, however the use of CFBA technology is discussed as well. Barr and 

Zachry completed the necessary investigative tasks to develop an opinion of probable 

cost and milestone construction schedule. 

A summary of the major report sections is provided in the following paragraphs. 

1.1 Major Equipment List 

Based on discussions with CliffsNR, Ducon Environmental Systems Inc. (Ducon) 

and Barr during site visits to the UTAC and Tilden facilities the week of 

September, 3, 2012, the preliminary list of equipment required for the project and 

design assumptions were developed. SDAs and associated auxiliary equipment 

are included for each of 3 lines (Line 1, 2A and 2B) at the UTAC facility and 2 

lines (one from existing north stack and one from existing south stack) at Tilden 

Line 1. Line 2 at UTAC and Tilden Line 1 flue gas streams are each split into 

two control equipment streams due to the significant amount of flue gas to be 

treated. 

1.2 Opinion of Probable Cost 

The opinion of probable cost for the ESPs, SDAs, baghouses, lime handling 

systems and associated equipment was provided by Ducon. A separate cost 

estimate for ESPs, CFBAs, baghouses, lime handling systems and associated 

equipment was provided by a CFBA supplier. An opinion of probable cost for the 

remaining materials and labor was developed by Zachry based on experience with 

similar type projects. Additionally, Zachry developed preliminary annual plant 

operations and maintenance (O&M) costs for a SDA based system to be used by 

Barr to develop an overall cost per ton of SO2 removed for the project. 

1.3 Milestone Schedule 

A milestone schedule was developed for both the UTAC and Tilden facilities 

based on preliminary estimated equipment lead times and Zachry experience with 

similar type projects. As indicated, the schedule duration from Notice to Proceed 

for engineering, procurement, and construction is anticipated to be approximately 

28 months for UTAC and 26 months for Tilden. 

A014562-RPTS001 RB 3 of 28
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Copyright © 2011, Zachry Engineering Corporation 

All Rights Reserved

arrangement sketches were developed based on equipment and ductwork 

locations as discussed during site visits to the UTAC and Tilden facilities the 

week of September, 3, 2012. Zachry developed preliminary layouts and 

configurations for the ESPs, SDAs and baghouses as the quotations received from 

Ducon and the CFBA supplier included equipment layouts that exceed the 

footprint limitations discussed during the site visits. 

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SECTION 2 – MAJOR EQUIPMENT LIST 

The following equipment lists are based on SDA technology. A CFBA based system 

would consist of similar equipment with CFBAs substituting SDAs in each list. 

2.1 United Taconite Facility (Forbes, MN) 

The following major equipment items are included to support flue gas 

desulfurization of Lines 1, 2A and 2B at UTAC: 

Equipment Quantity Description/Function

Electrostatic 

Precipitator (ESP) 3

Removes particulate from flue gas stream to protect 

the process waste gas fan. Particulate, which is 

primarily iron ore, is recycled back to process.

Process Waste Gas 

Fan

3

Draws flue gas through ductwork and ESP. 

Maintains balance on furnace. Includes single 

speed motor.

Spray Dryer 

Absorber (SDA) 3

Removes SO2 from flue gas stream utilizing 

atomized lime slurry

Baghouse 3

Removes particulate and SDA products from flue 

gas

Induced draft (ID) 

fan 3

Draws flue gas through SDA, baghouse, ductwork 

and out the stack. Includes VFD motor.

Stack 3 150 ft stack exhausts flue gas to atmosphere

Iron Ore Dust and 

Ash Handling from 

ESPs

3

Mechanical conveyors take solids from ESP 

hoppers to slurry tank. Water is added and slurry is 

pumped to an existing process thickener.

Spent Reagent 

Handling from SDA 

and Baghouse

1

Mechanical conveyors direct ash collected in the 

SDAs and baghouses to one 150 ton ash silo 

equipped for dry ash truck unloading.

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Lime Handling 

System 1

Hydrated lime is delivered to site and stored in one 

lime silo. Hydrated lime is directed to a slurry tank 

where water is added. 3 pumps direct the lime slurry 

to each SDA.

Ductwork N/A

Stainless steel ductwork directs the flue gas from the 

existing furnace tie points through the existing plant 

and new equipment. Carbon steel ductwork is 

included between the baghouse and the stack.

Recouperating 

Line Bleed 3

During normal operation, high temperature gas is 

ducted to the main ductwork from the recouperating 

lines to heat the flue gas to prevent water/acid 

condensation in the SDA/baghouse system.

Duct Burners 3

During startup, duct burners fueled by natural gas are 

used to heat the flue gas leading to SDAs.

CEMS 3

CEMS from the existing plant stacks will be moved 

to the new stacks and re-used.

Power Distribution 

Center 1

Includes MCCs, MV switchgear, VFDs, panels, dry 

transformers and switchboard

2.2 Tilden Taconite Facility (Ishpeming, MI)

The following major equipment items are included to support flue gas 

desulfurization of Lines 1 at Tilden:

Equipment Quantity Description/Function

Spray Dryer 

Absorber (SDA) 2

Removes SO2 from flue gas stream utilizing atomized 

lime slurry

Baghouse 2 Removes particulate and SDA products from flue gas

Induced draft (ID) 

fan 2

Draws flue gas through SDA, baghouse, ductwork 

and out the stack. Includes VFD motor.

Stack 1

150 ft stack exhausts flue gas from both flue gas 

streams to atmosphere

Spent Reagent 

Handling from 

SDA and 

Baghouse

1

Mechanical conveyors direct ash collected in the 

SDAs and baghouses to one 100 ton ash silo 

equipped for dry ash truck unloading.

Lime Handling 

System 1

Hydrated lime is delivered to site and stored in one 

lime silo. Hydrated lime is directed to a slurry tank 

where water is added. 2 pumps direct the lime slurry 

to each SDA.

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Ductwork N/A

Stainless steel ductwork directs the flue gas from the 

existing Line 1 north and south stack tie points above 

the existing plant roof and down and through the new 

equipment. Carbon steel ductwork is included 

between the baghouse and the stack.

Duct Burners 2

During startup, duct burners fueled by natural gas are 

used to heat the flue gas leading to SDAs.

CEMS 1

New CEMS installed to monitor emissions from the 

stack.

Power Distribution 

Center 1

Includes MCCs, MV switchgear, VFDs, panels, dry 

transformers and switchboard

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All Rights Reserved

SECTION 3 – OPINION OF PROBABLE COST 

Based on discussions with CliffsNR, Ducon and Barr during site visits to the UTAC and 

Tilden facilities the week of September, 3, 2012, the preliminary opinion of probable cost 

was developed. The opinion of probable cost for the ESPs, SDAs, baghouses, lime 

handling systems and associated equipment (materials only) are based on the Ducon 

proposal. An opinion of probable cost for the remaining materials and labor was 

developed by Zachry based on experience with similar type projects. Additionally, 

Zachry developed preliminary annual plant operations and maintenance (O&M) cost 

estimates for a SDA based system to be used by Barr to develop an overall cost per ton of 

SO2 removed for the project. 

The opinion of probable costs for UTAC and Tilden are shown in Tables 3.1 and 3.3, 

respectively. The preliminary O&M cost estimates for UTAC and Tilden are shown in 

Tables 3.2 and 3.4, respectively. 

The opinion of probable cost was developed based on the following assumptions and 

clarifications: 

3.1 Financial Assumptions: 

The opinion of probable costs are ± 40%. 

Project will be executed as a “conventional” engineering and construction job, 

not an EPC (Engineer, Procure, Construct). 

No escalation included. All pricing is September, 2012 dollars. 

Excluded are sales tax, performance bonds, Owner’s finance cost, and 

Owner’s staff time cost. 

No soil environmental evaluation or remediation included. 

Delivery costs for all equipment included, FOB site. 

To the extent Zachry Engineering provides estimates of any kind, whether 

financial, quantities or otherwise, Barr understands and agrees that (i) Zachry 

Engineering is providing only a general estimate based on Zachry 

Engineering’s reasonable judgment; (ii) any proposed range of accuracy 

serves only as a guideline; (iii) the achievement of any estimate is dependent 

upon a variety of uncertain factors over which Zachry Engineering has no 

control, examples of which may include escalation costs, cost and availability 

of labor, materials, equipment, bidding or other methodology, changing 

market conditions, timing of purchases, third party data, etc., and (iv) Zachry 

Engineering does not warrant or guarantee and Barr waives all liability of 

Zachry Engineering and its employees arising from or in connection with the 

provision of such estimates, including without limitation differences between 

Zachry Engineering’s estimates and the cost, quantity or other figures actually 

experienced. This provision shall survive any Agreement. 

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All Rights Reserved

3.2 Site Layout, Scope Assumptions: 

 Equipment locations and tie-ins fo r ductwork and convey

drawings. 

 Skirt type enclosures under the SDAs, ESPs, baghouses and silos for freeze 

protection of these areas as well as miscellaneous equipment such as pumps 

and the hydrated lime mix tank. 

 All piping will be above ground. 

 Due to lack of geotechnical information at the time of this report, piling 

assumed for the UTAC site and rock anchors assumed for Tilden. Piling 

length and capacity was approximated based on experience with similar 

equipment and geology. 

 Transformer foundation with oil containment required. 

 Existing electrical ductbank feeding the UTAC plant that is below new 

equipment footprint will be abandoned in place and new ductbank installed. 

 All new cable at Tilden plant will be in tray and conduit. above ground cable 

3.3 Project/Design Assumptions: 

 Design and opinion of probable cost for the ESPs, SDAs, baghouses, lime 

handling systems (material costs) are based on the Ducon proposal. 

Additional ductwork is added to reconfigure the Ducon equipment to fit 

within the allotted footprint (UTAC only). Labor estimates for these items by 

Zachry. 

 Equipment sizing for items in Zachry scope is based on approximately 85 

percent to 95 percent of SO2 removal. 

 Thickness of ductwork and equipment insulation is 4 inches. 

 All electrical equipment except the ID fan and process waste gas fan will 

receive 480 V. These large fans will require 4,160 V. 

 Existing substations have the capacity to feed the new electrical equipment. 

New transformers are included in the opinion of probable cost. 

 A support structure with interface with the existing building is assumed for the 

ductwork on the roof at the Tilden site, extensive structural modifications to 

the existing structur e are required. 

 Lead based paint abatement assumed for construction in the existing plant. 

No asbestos abatement required in the existing plant. No soil environmental 

evaluation or remediation is required. 

 Ductwork is ASTM 316 stainless steel due to potential for corrosion under 

low temperature conditions and lack of access to the new ductwork as well as 

high temperature upset conditions. Ductwork between the baghouses and 

stacks are carbon steel. The stacks are coated carbon steel. Labor estimates 

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for UTAC include limited access within the plant and manual installation of 

ductwork inside of the existing facility. 

Convert existing water knock out vessels at UTAC to initial particulate dropout device near new ductwork tie-point to furnace and remove existing venturi 

scrubbers. 

O&M estimates and inputs are based on information received from CliffsNR, 

Ducon and Barr during site visits to the UTAC and Tilden facilities the week 

of September, 3, 2012 in addition to Zachry experience with similar type 

projects. 

The O&M cost estimates (Tables 3.2 and 3.4) are based on the following 

assumptions: 

o SDA based system. 

o Electricity is for new equipment only and credit is not included for 

disconnected loads. Costs based on /kWh. 

o Baghouse replacement costs for bags (fiberglass) and cages based on 

bag replacement every 3 years and cage replacement every 6 years. 

o Solid waste disposal based on /ton. 

o Hydrated lime usage based on values provided in Ducon proposal and 

cost based on /ton. 

o Water usage based on values provided in Ducon proposal for lime 

slurry and cooling requirements. 

o Water costs based on / 1,000 gallons. 

o Water softener salt costs based on /lb. 

o SO2 removal efficiency is > 90%. 

o Additional assumptions listed on O&M cost estimate tables. 

3.4 Circulating Fluidized Bed Absorber (CFBA) Based System

For a CFBA based system, the material cost estimates for the Electrostatic 

Precipitators and SDA/Baghouse Treatment Trains as shown in Tables 3.1 and 3.3 

can be substituted with the following material cost estimates from the CFBA 

supplier: 

UTAC: $24,685,700 (Lines 1, 2A and 2B ESPs, CFBAs, baghouses, 

equipment only, no labor) 

Tilden: $13,000,900 (Lines 1N and 1S CFBAs, baghouses, equipment only, 

no labor) 

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Other equipment cost differences may exist between the SDA and CFBA based 

systems for items, such as ductwork and spent reagent silos/handling systems. 

Additionally, O&M costs would be different for a CFBA based system as lime 

usage is generally greater for the CFBA supplier proposal. There is a potential for 

footprint issues as well since the CFBA equipment requires more space than 

SDAs. It is recommended that the cost, O&M, and footprint differences between 

the two technologies be evaluated further in the next phase of the project. 

A014562-RPTS001 RB 11 of 28
TABLE 3.1 - UTAC DRY ESP/SDA/BAGHOUSE FEASIBILITY STUDY

Opinion of Probable Cost - PRELIMINARY

26-Sep-12

Item Material Labor Total

DIRECT COST ITEMS

CIVIL/STRUCTURAL

 Demo Existing Equip. and Building Penetrations $25,000 $375,000 $400,000

 Structural Modifications $175,000 $400,000 $575,000

 Misc. Platforms, Support, Access & Enclosures $1,125,000 $750,000 $1,875,000

 Concrete $1,050,000 $700,000 $1,750,000

 Piling $300,000 $450,000 $750,000

 Subtotal - Civil Structural $2,675,000 $2,675,000 $5,350,000

MECHANICAL

 Demolition $25,000 $125,000 $150,000

 Lead Paint Abatement $10,000 $90,000 $100,000

 Line 1 Ductwork $6,125,000 $2,200,000 $8,325,000

 Line 2A Ductwork $6,500,000 $2,350,000 $8,850,000

 Line 2B Ductwork $5,500,000 $1,925,000 $7,425,000

 Added Ductwork Per Zachry Layout Total $2,250,000 $750,000 $3,000,000

 3 Electrostatic Precipitators $6,300,000 $4,410,000 $10,710,000

 3 SDA/Baghouse Treatment Trains $31,700,000 $22,190,000 $53,890,000

 Process Waste Gas Fan $2,325,000 $1,627,500 $3,952,500

 Duct Burner $900,000 $630,000 $1,530,000

 ID Fan $2,025,000 $1,417,500 $3,442,500

 Stack $1,725,000 $1,207,500 $2,932,500

 Ash Handling System $1,650,000 $1,155,000 $2,805,000

 Water Softener $100,000 $70,000 $170,000

 Air Compressors $225,000 $67,500 $292,500

 Compressed Air Piping $22,500 $22,500 $45,000

 SDA Water Supply Piping $25,000 $25,000 $50,000

 Lime Slurry Piping $50,000 $50,000 $100,000

 Natural Gas Piping for Duct Burners $18,000 $18,000 $36,000

 Fire Protection $15,000 $15,000 $30,000

 HVAC for ESP, SDA & PJFF Enclosures $100,000 $100,000 $200,000

 Relocate CEMS $15,000 $60,000 $75,000

 Vendor Support - Service Engineers $0 $650,000 $650,000

 Miscellaneous Mechanical Equipment $50,000 $50,000 $100,000

 Subtotal - Mechanical $67,655,500 $41,205,500 $108,861,000

ELECTRICAL & CONTROLS

 Demolition $0 $50,000 $50,000

 4160 UG Duct Bank $150,000 $150,000 $300,000

 Power Distribution Center $3,275,000 $50,000 $3,325,000

 4160 Volt Switchgear $200,000 $50,000 $250,000

 480 Volt Transformer $180,000 $45,000 $225,000

 Indoor/Outdoor LightingLighting $25,000 $25,000 $50,000

 Safety Switches & Terminations $25,000 $25,000 $50,000

A014562-RPTS001 RB 12 of 28
TABLE 3.1 - UTAC DRY ESP/SDA/BAGHOUSE FEASIBILITY STUDY

Opinion of Probable Cost - PRELIMINARY

26-Sep-12

Item Material Labor Total

 Cable Tray and Miscellaneous Conduit $225,000 $350,000 $575,000

 Power Distribution & Instrument Cable $750,000 $1,250,000 $2,000,000

 Gounding System $25,000 $25,000 $50,000

 Medium Voltage Emergency Generator Rental $50,000 $0 $50,000

 Control System Hardware & Panels $450,000 $150,000 $600,000

 Field Devices $125,000 $75,000 $200,000

 Fiber Optic Cable $10,000 $40,000 $50,000

 Subtotal - Electrical & Controls $5,490,000 $2,285,000 $7,775,000

 Subtotal of Above $75,820,500 $46,165,500 $121,986,000

 Freight $3,791,025 $0 $3,791,025

 Direct Cost Contingency $7,582,050 $4,616,550 $12,198,600

 Total Direct Costs $87,193,575 $50,782,050 $137,975,625

INDIRECT COST ITEMS 

 Performance Bonds, All Contracts - not required. $0 $0 $0

 Sales Tax, All Materials $0 $0 $0

 Engineering - Design $0 $7,000,000 $7,000,000

 Construction Management Services $0 $2,100,000 $2,100,000

 Startup and Commissioning Services $0 $700,000 $700,000

 Construction Testing Services $0 $200,000 $200,000

 Soil Borings $0 $150,000 $150,000

 Emission Testing $0 $100,000 $100,000

 Owner's Finance Cost $0 $0 $0

 Owner's Staff Time $0 $0 $0

 Startup Materials, EG, lime $100,000 $0 $100,000

Subtotal Above $100,000 $10,250,000 $10,350,000

 Indirect Cost Contingency $10,000 $1,025,000 $1,035,000

 Total Indirect Cost $110,000 $11,275,000 $11,385,000

Grand Total Opinion of Probable Cost $87,303,575 $62,057,050 $149,360,625

A014562-RPTS001 RB 13 of 28
Direct Annual Operating & Maintenance Costs (Preliminary)

Operations: Hours

 Operator Cost $ 161,838

 Operator Supervisor Cost $ 24,276

Maintenance:

 Maintenance Hours $ 161,838

 Maintenance Materials $ 250,000

Utilities, Supplies, Replacement & Waste Disposal:

 Compressed Air Included

 Electricity $ 4,135,860

 Filter Bag & Cage Replacement

$ 484,704

 Solid Waste Disposal $ 431,568

 Lime $ 788,011

 Water & Softener Salt

$ 233,047

Total Direct Annual Operating & Maintenance Costs (Preliminary) $ 6,671,142

TABLE 3.2 - UTAC ESP/SDA/BAGHOUSE O&M COST ESTIMATES

A014562-RPTS001 RB 14 of 28
TABLE 3.3 - TILDEN SDA/BAGHOUSE FEASIBILITY STUDY

Opinion of Probable Cost - PRELIMINARY

26-Sep-12

Item Material Labor Total

DIRECT COST ITEMS

CIVIL/STRUCTURAL

 Demo Existing Equip. and Building Penetrations $25,000 $125,000 $150,000

 Structural Modifications $750,000 $1,750,000 $2,500,000

 Misc. Platforms, Support, Access & Enclosures $750,000 $500,000 $1,250,000

 Concrete $600,000 $400,000 $1,000,000

 Rock Anchors $100,000 $150,000 $250,000

 Subtotal - Civil Structural $2,225,000 $2,925,000 $5,150,000

MECHANICAL

 Demolition $15,000 $85,000 $100,000

 Lead Paint Abatement $5,000 $45,000 $50,000

 Line 1 Ductwork $6,200,000 $1,700,000 $7,900,000

 Duct Burner $600,000 $420,000 $1,020,000

 2 SDA/Baghouse Trains $25,000,000 $17,500,000 $42,500,000

 ID Fan $1,350,000 $945,000 $2,295,000

 Stack $775,000 $542,500 $1,317,500

 Ash Handling System $1,025,000 $717,500 $1,742,500

 Water Softener $100,000 $70,000 $170,000

 Air Compressors $150,000 $45,000 $195,000

 Compressed Air Piping $15,000 $15,000 $30,000

 SDA Water Supply Piping $25,000 $25,000 $50,000

 Lime Slurry Piping $25,000 $25,000 $50,000

 Natural Gas Piping for Duct Burners $18,000 $18,000 $36,000

 Fire Protection $10,000 $10,000 $20,000

 HVAC for ESP, SDA & PJFF Enclosures $75,000 $75,000 $150,000

 CEMS $325,000 $65,000 $390,000

 Vendor Support - Service Engineers $0 $500,000 $500,000

 Miscellaneous Mechanical Equipment $50,000 $50,000 $100,000

 Subtotal - Mechanical $35,763,000 $22,853,000 $58,616,000

ELECTRICAL & CONTROLS

 Demolition $0 $25,000 $25,000

 13800 V Cable, Switchgear, and Circuit Breakers $250,000 $75,000 $325,000

 Power Distribution Center $2,750,000 $50,000 $2,800,000

 7.5 MVA Transformer $600,000 $50,000 $650,000

 480 Volt Transformer $120,000 $30,000 $150,000

 Indoor/Outdoor LightingLighting $25,000 $25,000 $50,000

 Safety Switches & Terminations $25,000 $25,000 $50,000

 Cable Tray and Miscellaneous Conduit $150,000 $250,000 $400,000

 Power Distribution & Instrument Cable $500,000 $825,000 $1,325,000

 Gounding System $25,000 $25,000 $50,000

 Medium Voltage Emergency Generator Rental $50,000 $0 $50,000

 Control System Hardware & Panels $300,000 $100,000 $400,000

A014562-RPTS001 RB 15 of 28
TABLE 3.3 - TILDEN SDA/BAGHOUSE FEASIBILITY STUDY

Opinion of Probable Cost - PRELIMINARY

26-Sep-12

Item Material Labor Total

 Field Devices $100,000 $50,000 $150,000

 Fiber Optic Cable $5,000 $15,000 $20,000

 Subtotal - Electrical & Controls $4,900,000 $1,545,000 $6,445,000

 Subtotal of Above $42,888,000 $27,323,000 $70,211,000

 Freight $2,144,400 $0 $2,144,400

 Direct Cost Contingency $4,288,800 $2,732,300 $7,021,100

 Total Direct Costs $49,321,200 $30,055,300 $79,376,500

INDIRECT COST ITEMS 

 Performance Bonds, All Contracts - not required. $0 $0 $0

 Sales Tax, All Materials $0 $0 $0

 Engineering - Design $0 $4,000,000 $4,000,000

 Construction Management Services $0 $1,200,000 $1,200,000

 Startup and Commissioning Services $0 $400,000 $400,000

 Construction Testing Services $0 $200,000 $200,000

 Soil Borings $0 $150,000 $150,000

 Emission Testing $0 $75,000 $75,000

 Owner's Finance Cost $0 $0 $0

 Owner's Staff Time $0 $0 $0

 Startup Materials, EG, lime $100,000 $0 $100,000

Subtotal Above $100,000 $6,025,000 $6,125,000

 Indirect Cost Contingency $10,000 $602,500 $612,500

 Total Indirect Cost $110,000 $6,627,500 $6,737,500

Grand Total Opinion of Probable Cost $49,431,200 $36,682,800 $86,114,000

A014562-RPTS001 RB 16 of 28
Direct Annual Operating & Maintenance Costs (Preliminary)

Operations: Hours

 Operator Cost $ 107,892

 Operator Supervisor Cost $ 16,184

Maintenance:

 Maintenance Hours $ 107,892

 Maintenance Materials $ 250,000

Utilities, Supplies, Replacement & Waste Disposal:

 Compressed Air Included

 Electricity $ 933,066

 Filter Bag & Cage Replacement

$ 367,200

 Solid Waste Disposal $ 303,696

 Lime $ 556,243

 Softener Salt

$ 224,415

Total Direct Annual Operating & Maintenance Costs (Preliminary) $ 2,866,588

TABLE 3.4 - TILDEN SDA/BAGHOUSE O&M COST ESTIMATES

A014562-RPTS001 RB 17 of 28
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Copyright © 2011, Zachry Engineering Corporation 

All Rights Reserved

SECTION 4 – MILESTONE SCHEDULE 

A milestone schedule was developed for both the UTAC and Tilden facilities based on 

preliminary estimated equipment lead times for a SDA based system and Zachry 

experience with similar type projects. As indicated, the schedule duration from Notice to 

Proceed for engineering, procurement, and construction is anticipated to be 

approximately 28 months for UTAC and 26 months for Tilden. 

A014562-RPTS001 RB 18 of 28
Activity Name Start Finish

Total 08-Apr-13 16-Nov-15

UTAC Lines 2A and 2B 08-Apr-13 16-Nov-15

Engineering 08-Apr-13 11-Jun-14

Engineering Package Bid/Award 08-Apr-13 01-Jul-13Studies, Permitting, Preliminary Engineering 08-Apr-13 16-Dec-13Detailed Design and Engineering 01-Jul-13 11-Jun-14Notice to Proceed (Engineering) 01-Jul-13

Equipment Procurement 01-Jul-13 01-Dec-14

Specs, Prep - FF/SDA/ESP 01-Jul-13 03-Sep-13Specification Preparation - BOP 01-Jul-13 26-Aug-13Vendor Engineering 01-Jul-13 29-Oct-13Bidding/Award 27-Aug-13 22-Oct-13Bidding/Award 04-Sep-13 29-Oct-13Manufacture and Deliver BOP 23-Oct-13 30-Apr-14Full Release to Manufacture 29-Oct-13Manufacture & Deliver FF/SDA/ESP 30-Oct-13 01-Dec-14

Engineering Bidding Construction Packages 02-Dec-13 11-Jun-14

Eng/Spec - Foundation Packages 02-Dec-13 29-Jan-14Engineering Specification Prep - Structural/Mechanical/Electrical 02-Dec-13 26-Mar-14Bid/Award Foundations 30-Jan-14 12-Mar-14Bidding/Award Structural/Mechanical/Electrical Packages 27-Mar-14 11-Jun-14

Construction Pre-Outage 13-Mar-14 10-Aug-15

Mobilize/Underground Utilities/Drive Piles 13-Mar-14 11-Jun-14Install Pile Caps/Slabs 24-Apr-14 23-Jul-14Mobilize - Structural/Mechanical/Electrical 12-Jun-14 09-Jul-14Install BOP 10-Jul-14 13-May-15Pre-Outage Existing Plant Demolition 10-Jul-14 01-Oct-14Install Ductwork in Existing Plant 02-Oct-14 21-Jan-15Install FF/SDA/ESP 02-Dec-14 10-Aug-15

Tie-In Outage 11-Aug-15 07-Sep-15

Outage Existing Plant Demolition 11-Aug-15 07-Sep-15Tie-In Outage 11-Aug-15 07-Sep-15Connect Ductwork to Furnace 11-Aug-15 07-Sep-15

Checkout/Startup Test/Completion 08-Sep-15 16-Nov-15

Startup/Commission AQCS 08-Sep-15 05-Oct-15

AQCS Tuning/Optimization 22-Sep-15 02-Nov-15

Compliance/CEMS Testing 20-Oct-15 16-Nov-15Startup Complete 16-Nov-15

M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A 

2013 2014 2015 

11-Jun-14, Engineering

Engineering Package Bid/Award

Studies, Permitting, Preliminary Engineering

Detailed Design and Engineering

Notice to Proceed (Engineering)

01-Dec-14, Equipmen

Specs, Prep - FF/SDA/ESP

Specification Preparation - BOP

Vendor Engineering

Bidding/Award

Bidding/Award

Manufacture and Deliver BOP

Full Release to Manufacture

Manufacture & Delive

11-Jun-14, Engineering Bidding Con

Eng/Spec - Foundation Packages

Engineering Specification Prep - Structural

Bid/Award Foundations

Bidding/Award Structural/MechanicaMobilize/Underground Utilities/Drive 

Install Pile Caps/Slabs

Mobilize - Structural/Mechanical/E

Install B

Pre-Outage Existing Plant 

Install Ductwork i

UTAC Lines 2A and 2B Proposal Schedule 

 Zachry Engineering Corporation Page 1 of 1
Activity Name Start Finish

Total 07-May-15 21-Mar-18

UTAC Line 1 07-May-15 21-Mar-18

Engineering 07-May-15 28-Jun-16

Engineering Package Bid/Award 07-May-15 29-Jul-15Studies, Permitting, Preliminary Engineering 07-May-15 06-Jan-16Detailed Design and Engineering 29-Jul-15 28-Jun-16Notice to Proceed (Engineering) 16-Nov-15

Equipment Procurement 16-Nov-15 05-Apr-17

Specs, Prep - FF/SDA/ESP 16-Nov-15 15-Jan-16Specification Preparation - BOP 16-Nov-15 08-Jan-16Vendor Engineering 16-Nov-15 11-Mar-16Bidding/Award 11-Jan-16 04-Mar-16Bidding/Award 18-Jan-16 11-Mar-16Manufacture and Deliver BOP 07-Mar-16 02-Sep-16Full Release to Manufacture 11-Mar-16Manufacture & Deliver FF/SDA/ESP 14-Mar-16 05-Apr-17

Engineering Bidding Construction Packages 11-Apr-16 14-Oct-16

Eng/Spec - Foundation Packages 11-Apr-16 03-Jun-16Engineering Specification Prep - Structural/Mechanical/Electrical 11-Apr-16 29-Jul-16Bid/Award Foundations 06-Jun-16 15-Jul-16Bidding/Award Structural/Mechanical/Electrical Packages 01-Aug-16 14-Oct-16

Construction Pre-Outage 18-Jul-16 13-Dec-17

Mobilize/Underground Utilities/Drive Piles 18-Jul-16 14-Oct-16Install Pile Caps/Slabs 29-Aug-16 25-Nov-16Mobilize - Structural/Mechanical/Electrical 17-Oct-16 11-Nov-16Install BOP 14-Nov-16 15-Sep-17Pre-Outage Existing Plant Demolition 14-Nov-16 03-Feb-17Install Ductwork in Existing Plant 06-Feb-17 26-May-17Install FF/SDA/ESP 06-Apr-17 13-Dec-17

Tie-In Outage 14-Dec-17 10-Jan-18

Outage Existing Plant Demolition 14-Dec-17 10-Jan-18Tie-In Outage 14-Dec-17 10-Jan-18Connect Ductwork to Furnace 14-Dec-17 10-Jan-18

Checkout/Startup Test/Completion 11-Jan-18 21-Mar-18

Startup/Commission AQCS 11-Jan-18 07-Feb-18

AQCS Tuning/Optimization 25-Jan-18 07-Mar-18

Compliance/CEMS Testing 22-Feb-18 21-Mar-18Startup Complete 21-Mar-18

A M J J A S ON D J F M A M J J A S ON D J F M A M J J A S ON D 

2015 2016 2017 

28-Jun-16, Engineering

Engineering Package Bid/Award

Studies, Permitting, Preliminary Engineering

Detailed Design and Engineering

Notice to Proceed (Engineering)

05-Apr-17, Equipm

Specs, Prep - FF/SDA/ESP

Specification Preparation - BOP

Vendor Engineering

Bidding/Award

Bidding/Award

Manufacture and Deliver BOP

Full Release to Manufacture

Manufacture & De

14-Oct-16, Engineering Bidding 

Eng/Spec - Foundation Packages

Engineering Specification Prep - Struc

Bid/Award Foundations

Bidding/Award Structural/MechaMobilize/Underground Utilities/D

Install Pile Caps/Slabs

Mobilize - Structural/Mechani

Insta

Pre-Outage Existing P

Install Ductwo

UTAC Line 1 Proposal Schedule 

 Zachry Engineering Corporation Page 1 of 1
Activity Name Start Finish

Total 08-Apr-13 01-Sep-15

Tilden Line 1 08-Apr-13 01-Sep-15

Engineering 08-Apr-13 11-Jun-14

Engineering Package Bid/Award 08-Apr-13 01-Jul-13Studies, Permitting, Preliminary Engineering 08-Apr-13 16-Dec-13Detailed Design and Engineering 01-Jul-13 11-Jun-14Notice to Proceed (Engineering) 01-Jul-13

Equipment Procurement 01-Jul-13 30-Sep-14

Specs, Prep - FF/SDA 01-Jul-13 03-Sep-13Specification Preparation - BOP 01-Jul-13 26-Aug-13Vendor Engineering 01-Jul-13 29-Oct-13Bidding/Award 27-Aug-13 22-Oct-13Bidding/Award 04-Sep-13 29-Oct-13Manufacture and Deliver BOP 23-Oct-13 30-Apr-14Full Release to Manufacture 29-Oct-13Manufacture & Deliver FF/SDA 30-Oct-13 30-Sep-14

Engineering Bidding Construction Packages 02-Dec-13 11-Jun-14

Eng/Spec - Foundation Packages 02-Dec-13 29-Jan-14Engineering Specification Prep - Structural/Mechanical/Electrical 02-Dec-13 26-Mar-14Bid/Award Foundations 30-Jan-14 12-Mar-14Bidding/Award Structural/Mechanical/Electrical Packages 27-Mar-14 11-Jun-14

Construction Pre-Outage 13-Mar-14 09-Jun-15

Mobilize/Underground Utilities 13-Mar-14 11-Jun-14Install Slabs 24-Apr-14 23-Jul-14Mobilize - Structural/Mechanical/Electrical 12-Jun-14 09-Jul-14Install BOP 10-Jul-14 13-May-15Pre-Outage Existing Plant Demolition 10-Jul-14 01-Oct-14Install FF/SDA 01-Oct-14 09-Jun-15Install Ductwork in Existing Plant 02-Oct-14 21-Jan-15

Tie-In Outage 10-Jun-15 23-Jun-15

Outage Existing Plant Demolition 10-Jun-15 23-Jun-15Tie-In Outage 10-Jun-15 23-Jun-15Connect Ductwork to Stacks 10-Jun-15 23-Jun-15

Checkout/Startup Test/Completion 24-Jun-15 01-Sep-15

Startup/Commission AQCS 24-Jun-15 21-Jul-15

AQCS Tuning/Optimization 08-Jul-15 18-Aug-15

Compliance/CEMS Testing 05-Aug-15 01-Sep-15Startup Complete 01-Sep-15

M A M J J A S O N D J F M A M J J A S O N D J F M A M J 

2013 2014 201

11-Jun-14, Engineering

Engineering Package Bid/Award

Studies, Permitting, Preliminary Engineering

Detailed Design and Engineering

Notice to Proceed (Engineering)

30-Sep-14, Equipment 

Specs, Prep - FF/SDA

Specification Preparation - BOP

Vendor Engineering

Bidding/Award

Bidding/Award

Manufacture and Deliver BOP

Full Release to Manufacture

Manufacture & Deliver F

11-Jun-14, Engineering Bidding C

Eng/Spec - Foundation Packages

Engineering Specification Prep - Structur

Bid/Award Foundations

Bidding/Award Structural/Mechan

0

Mobilize/Underground Utilities

Install Slabs

Mobilize - Structural/Mechanica

Ins

Pre-Outage Existing Pla

I

Install Ductwo

Tilden Line 1 Proposal Schedule 

 Zachry Engineering Corporation Page 1 of 1
DRY FLUE GAS

DESULFURIZATION STUDY

P:\BARR_ENGINEERING\014562\adminsrv\Documents\Reports\RPTS001\Rev B\A014562-RPTS001 RB.doc 

Copyright © 2011, Zachry Engineering Corporation 

All Rights Reserved

SECTION 5 – DRAWINGS 

Preliminary process flow diagrams and general arrangement sketches were developed 

based on equipment and ductwork locations as discussed during site visits to the UTAC 

and Tilden facilities the week of September, 3, 2012. Zachry developed preliminary 

layouts and configurations for the ESPs, SDAs and baghouses as the quotations received 

from Ducon and the CFBA supplier included equipment layouts that exceed the footprint 

limitations discussed during the site visits. 

The drawings are based on SDA based systems. For CFBA based systems there is a 

potential for footprint issues since the CFBA equipment requires more space than SDAs. 

It is recommended that this issue is evaluated further in the next phase of the project. 

A014562-RPTS001 RB 22 of 28
 

 

 

 

 

 

 

 

 

G

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EFERENCE ONLY.

 

INARY

STRUCTION

/2012

ONITE FACILITY

ULFURIZATION STUDY

LOW DIAGRAM

 

 

 

 

 

 

 

 

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DATE DRWN DSND CHKD CHKD

X MINNEAPOLIS, MN OMAHA, NE SAN ANTONIO, TX

HOE STREET, TOWER 1, SUITE 900, DENVER, CO 80202-4256

APPROVED DM

APPROVED PM SKETCH-

) RETAINS ALL RIGHT, TITLE AND INTEREST, IN AND TO

D TO, ALL INTELLECTUAL PROPERTY DEVELOPED BY,OR

G, NOR ANY INFORMATION CONTAINED HEREIN, SHALL

R THE PREPARATION OF DRAWINGS OR APPARATUS,

EXPRESSLY AUTHORIZED IN WRITING BY ZACHRY.

TURAL RESOURCES

A014562-RPTS001 RB 23 of 28
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NOT FOR CONSTRUCTION

AS OF 9/26/2012

PLAN

REFERENCE DRAWINGS X

 1. SKETCH 001 S02

UNITED TACONITE FACILITY

DRY FLUE GAS DESULFURIZATION STUDY

GENERAL ARRANGEMENT

 2. ALLIS-CHALMERS

 PELLET PLANT GENERAL ARRANGEMENT; PLAN

 DRAWING NO. 42-511-232, REV 2

UNITED TACONITE FACILITY

DRY FLUE GAS DESULFURIZATION STUDY

GENERAL ARRANGEMENT

 

 

 

 

 

 

 

 

 

 

 

 001 01 A

GENERAL NOTES

 1. USE THIS SKETCH FOR REVIEW ONLY.

 2. PROPOSED ROUTING OF NEW DUCTWORK 

 THROUGH EXISTING PLANT IS REPRESENTED BY

 HATCHED AREAS. DUCTWORK ROUTING WILL 

 MINIMIZE INTERFERENCES WITH EXISTING 

 EQUIPMENT AS MUCH AS POSSIBLE.

PRELIMINARY

A ISSUED FOR COMMENTS 

DRAWN DESIGNED CHECKED CHECKED

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NO. REVISION DATE DRWN DSND CHKD CHKD

AMARILLO, TX CHARLOTTE, NC HOUSTON, TX MINNEAPOLIS, MN OMAHA, NE SAN ANTONIO, TX

ZACHRY ENGINEERING CORPORATION - 1515 ARAPAHOE STREET, TOWER 1, SUITE 900, DENVER, CO 80202-4256

APPROVED DM

APPROVED PM SKETCHZACHRY ENGINEERING CORPORATION (ZACHRY) RETAINS ALL RIGHT, TITLE AND INTEREST, IN AND TO

ALL INFORMATION INCLUDING, BUT NOT LIMITED TO, ALL INTELLECTUAL PROPERTY DEVELOPED BY,OR

ON BEHALF OF, ZACHRY. NEITHER THIS DRAWING, NOR ANY INFORMATION CONTAINED HEREIN, SHALL

BE REPRODUCED, USED OR RELIED UPON FOR THE PREPARATION OF DRAWINGS OR APPARATUS,

OR FOR ANY OTHER PURPOSE, EXCEPT AS EXPRESSLY AUTHORIZED IN WRITING BY ZACHRY.

CLIFFS NATURAL RESOURCES

A014562-RPTS001 RB 24 of 28
N PLAN

X

GENERAL NOTES

 1. USE THIS SKETCH FOR REVIEW ONLY.

REFERENCE DRAWINGS

 1. SKETCH-001 S01

UNITED TACONITE FACILITY

DRY FLUE GAS DESULFURIZATION STUDY

GENERAL ARRANGEMENT

 2. ALLIS-CHALMERS

 PELLET PLANT GENERAL ARRANGEMENT; PLAN

 DRAWING NO. 42-511-232, REV 2

PRELIMINARY

NOT FOR CONSTRUCTION

AS OF 9/26/2012

A ISSUED FOR COMMENTS 

UNITED TACONITE FACILITY

DRY FLUE GAS DESULFURIZATION STUDY

GENERAL ARRANGEMENT

 

 

 

 

 

 

 

 

 

 

 

 001 02 A

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NO. REVISION DATE DRWN DSND CHKD CHKD

AMARILLO, TX CHARLOTTE, NC HOUSTON, TX MINNEAPOLIS, MN OMAHA, NE SAN ANTONIO, TX

ZACHRY ENGINEERING CORPORATION - 1515 ARAPAHOE STREET, TOWER 1, SUITE 900, DENVER, CO 80202-4256

APPROVED DM

APPROVED PM SKETCHZACHRY ENGINEERING CORPORATION (ZACHRY) RETAINS ALL RIGHT, TITLE AND INTEREST, IN AND TO

ALL INFORMATION INCLUDING, BUT NOT LIMITED TO, ALL INTELLECTUAL PROPERTY DEVELOPED BY,OR

ON BEHALF OF, ZACHRY. NEITHER THIS DRAWING, NOR ANY INFORMATION CONTAINED HEREIN, SHALL

BE REPRODUCED, USED OR RELIED UPON FOR THE PREPARATION OF DRAWINGS OR APPARATUS,

OR FOR ANY OTHER PURPOSE, EXCEPT AS EXPRESSLY AUTHORIZED IN WRITING BY ZACHRY.

CLIFFS NATURAL RESOURCES

A014562-RPTS001 RB 25 of 28
 

 

 

 

 

 

 

 

 

 

 

ERENCE ONLY.

 

NARY

RUCTION

012

ITE FACILITY

FURIZATION STUDY

W DIAGRAM

 

 

 

 

 

 

 

 

 

 

 

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DATE DRWN DSND CHKD CHKD

INNEAPOLIS, MN OMAHA, NE SAN ANTONIO, TX

TREET, TOWER 1, SUITE 900, DENVER, CO 80202-4256

APPROVED DM

APPROVED PM SKETCHAINS ALL RIGHT, TITLE AND INTEREST, IN AND TO

 ALL INTELLECTUAL PROPERTY DEVELOPED BY,OR

OR ANY INFORMATION CONTAINED HEREIN, SHALL

E PREPARATION OF DRAWINGS OR APPARATUS,

ESSLY AUTHORIZED IN WRITING BY ZACHRY.

URAL RESOURCES

A014562-RPTS001 RB 26 of 28
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A014562-RPTS001 RB 28 of 28
Appendix D – Figures

Figure 1 Tilden Aerial View......................................................................................................30

Figure 2 Tilden Line 1 Top View .......................................................................................................31

Figure 3 Tilden Line 1 Side View..................................................................................................32

Figure 4 Tilden Line 1 3-D View_Page_1 ..........................................................................................33

Figure 5 Tilden Line 1 3-D View_Page_2 .....................................................................................34

Figure 6 S Side ....................................................................................................................36

Figure 7 Ducts under Line .............................................................................................................37

Figure 8 Ductwork and Structural Steel Below Furnace .....................................................................38

Figure 9 Stack Base and Blower Ductwork ....................................................................................39

Figure 10 N Side......................................................................................................................40

Figure 11 N Side 2 ........................................................................................................................41

Figure 12 Roof Monitor.................................................................................................................42

Figure 13 S Stack ..........................................................................................................................43

Figure 14 Stack Base and Duct...........................................................................................................44

Figure 15 Upper Level...................................................................................................................45

Figure 16 Upper Level 2................................................................................................................46
Figure 1 Tilden Aerial View

Truck & Rail

Deliveries

Proposed dry

FDG Site

Truck & Heavy

Equipment

Access Road

Greenball

Preparation

Proposed Duct

Location Line 1 Stacks

Figure 1

Tilden Line 1

Dry FGD location limitations
Figure 2 Tilden Line 1 Top View
Figure 3 Tilden Line 1 Side View
Figure 4 Tilden Line 1 3-D View_Page_1
Figure 5 Tilden Line 1 3-D View_Page_2
Figure 6 S Side
Figure 7 Ducts under Line
Figure 8 Ductwork and Structural Steel Below Furnace
Figure 9 Stack Base and Blower Ductwork
Figure 10 N Side
Figure 11 N Side 2
Figure 12 Roof Monitor
Figure 13 S Stack
Figure 14 Stack Base and Duct
Figure 15 Upper Level
Figure 16 Upper Level 2
Appendix E – Emission Control Equipment Supplier Dry FGD 

Proposals
CONFIDENTIAL – DRAFT BUDGETARY PROPOSAL FOR 

TWO (2) TREATMENT SYSTEMS EACH CONSISTING OF

ONE (1) DRY FGD AND ONE (1) BAGFILTER 

FOR 

TILDEN MINE in Preparation to Respond to the USEPA 

Federal Implementation Plan (BART for Regional Haze 

Reduction)

 

Submitted to:

Cliffs NATURAL Resources Corporation (Michigan Mining 

Operation, Richmond Township, MI 48062 USA)

Date: September 20, 2012 

 

PROPOSAL No: DC12-5173 TILDEN 

By

DUCON ENVIRONMENTAL SYSTEMS.

19 Engineers Lane., Farmingdale NY 11735, USA

Tel: (631) 694-1700; Fax: (631) 293-6129

URL: www.ducon.com; E-mail: info@ducon.com
Ducon Technologies Inc.

For Tilden Mine 

Proposal No DC12-5173 for a Dry FGD/Baghouse 

System 

The confidential information contained on this page is property of Ducon Technologies Inc. and is for the use of the recipient or their authorized agents. 

Any unauthorized use is strictly prohibited.

Page 2 of 12

1.0 INTRODUCTION

Ducon Environmental Systems (Ducon), is pleased to submit its proposal 

for two (2) treatment systems, each consisting of an FGD dry reactor and 

Baghouse Filter, in series, to Tilden Mine, Richmond Township, MI 48062, 

USA. The Dry FGD absorber reactors and Baghouse Filter systems, in 

series, control SOx emissions to the local environment, because SOx 

emissions contribute to regional haze. ESPs are pre-existing at the plant 

for the gas streams being retrofitted. ESP treated gas enters the Ducon 

treatment equipment. The proposed scope of supply is Ducon’s 

recommended retrofit technology for use at the Tilden Mine to comply with 

the USEPA Federal Implementation Plan (FIP), aimed at conformance with 

the Regional Haze Rule (reference 40 CFR, Part 51.308).

The technology treated by this draft proposal is subject to the USEPA 

mandate for the Tilden Mine site to use dry FGD technology as Best 

Achievable Retrofit Technology (BART) for SOx control. The Ducon dry 

technologies available to this site include: 1. Ducon Dry Absorbers which, 

with a baghouse, which can remove up to 95% of the SO2. 2. Dry reagent 

injection to ductwork, which has a relatively low efficiency of SO2 removal 

(~50 to 70%). The Dry FGD reactors can take several designs depending 

on the application. These dry reactors can also operate successfully at or 

below °F (the proposed design temperature) with a relatively small 

footprint (as needed at Tilden). Duct injection is not being recommended 

for Tilden. During the meeting it was noted by Barr Engineering, that hot 

air from the kiln may be available to optimize operating temperatures for the 

Ducon reactor, if needed. 

This proposal is tentative owing to the outstanding need to measure data 

for the actual composition of the gas stream. Based on information 

available from CliffsNR and Barr Engineering for the UTAC facility, the gas 

stream can contain H2SO4, HF and HCl, all still unreported, which may 

impact the sizing and performance of the system.

Ducon’s scope is complete, as outlined in this proposal, and is based on 

mutually agreed upon decisions made during the Tilden Mine site meeting, 

held in Richmond Township, MI, 6 September 2012, and includes all 

engineering, procurement, design and equipment, as defined within our 

scope, delivered to the jobsite. This proposal does not include any site 

erection or assembly of delivered equipment. Ducon will provide 

supervision for startup, commissioning and testing for the project. Per 

agreement with Barr Engineering and CliffsNR, the scope of Ducon’s 

proposal for equipment supply is flange-to-flange, and does not encompass 

external ducts, dampers, expansion joints, fans, stack, instruments, material 

handling and other necessary items for system integration. Lime 
Ducon Technologies Inc.

For Tilden Mine 

Proposal No DC12-5173 for a Dry FGD/Baghouse 

System 

The confidential information contained on this page is property of Ducon Technologies Inc. and is for the use of the recipient or their authorized agents. 

Any unauthorized use is strictly prohibited.

Page 3 of 12

preparation and delivery to the Dry FGD reactor, and storage silos (with 

auxiliary equipment) for recycle and disposal of spent lime, are extensions 

of Ducon’s scope, included in the budgetary price.

DUCON Environmental Systems Inc. is one of several air pollution control 

companies operating globally under common private ownership, each with 

a charter to design, build, commission and operate suites of pollution 

control equipment best suited to industry and utilities. 

Since its inception in 1938 Ducon has completed over 25,000 installations 

worldwide. Today, Ducon is a dominant market leader with its proven 

technologies and successful track record in the industrial air pollution 

control market. Ducon's air pollution control equipment is used to control 

toxic fumes, SO2, HCl, H2S, NOx and particulate from gaseous stream. 

DUCON is a unique company in the environmental control equipment field, 

because of its broad technology base and a diverse product line, enabling it 

to meet a wide variety of air pollution control and waste incineration 

applications in the market place.

DUCON has been selling its products to the Fortune 500 firms for the past 

60 years. The Company has an excellent name recognition and a 

tremendous amount of repeat business. DUCON'S equipment is known for 

quality workmanship, rugged construction, long service life and high 

efficiency.

DUCON’s products include: Mechanical Collector, Wet Scrubber, Marble 

Bed Scrubber, VENTURI Scrubber, Ventri-Rod Scrubber, Dynamic Wet 

Scrubber, Mist Eliminator, Packed Tower, Tray Tower, Spray Scrubber, Wet 

Electrostatic Precipitator, FCC Cyclone Collector, Pulse-Air Fabric Fitter, 

Activated Carbon Adsorber, VOC Control Scrubber, NOx Scrubber, Odor 

Control Scrubber, Flue Gas Desulfurization Scrubber, High Temperature 

Cyclone, Multiple-Hearth Incinerator and Rotary Kiln.

Over the years the Company has built up resources to provide single 

source process design, engineering, manufacturing and construction 

services on a variety of industrial, utility and energy related projects.

DUCON's staff consists of some of the industries finest engineers, 

designers, scientists, and other professionals. The entire technical and 

engineering staff is experienced in the design of systems, which meet the 

required objectives with the lowest system costs.

Over its 70 year history Ducon has secured the following patents and 

trademarks:
Ducon Technologies Inc.

For Tilden Mine 

Proposal No DC12-5173 for a Dry FGD/Baghouse 

System 

The confidential information contained on this page is property of Ducon Technologies Inc. and is for the use of the recipient or their authorized agents. 

Any unauthorized use is strictly prohibited.

Page 4 of 12

PATENT NO. TITLE

3,410,055 Fabric Bed Filter

3,798,882 Granular Bed Filter Apparatus & Method

3,854,902 Method of Filtering Gas

4,047,910 Scrubber for Collecting Fine Particles

4,067,704 Granular Bed Filter

4,072,130 Apparatus & Method for Generating Steam

4,140,497 Screenless Granular Bed Filter (Apparatus)

4,155,728 Screenless Granular Bed Filter (Method)

4,262,298 Control of Solids Discharge from Pressurized Vessel

4,305,737 Horizontal Venturi Scrubber

3,432,153 Apparatus for Collecting Contaminants from Gases

3,488,039 Filter Bed for Dust Collector

3,499,264 Method and Apparatus for Controlling Fume & Dust 

Emission from Cupola Furnaces & the Like

3,544,087 Filter Apparatus for Gas Scrubber

3,566,908 Gas Tight, Liquid Sealed, Swing Type Valve

Assembly

3,581,474 Gas Scrubber

3,656,279 Gas Scrubber

3,668,825 Method & Apparatus for Determining the Difficulty of 

Removing Pollutant by Wet Scrubbing Action

3,677,407 Method & Apparatus for Removing Sludge from 

Liquid

3,680,282 Gas Scrubber

3,683,593 Gas Scrubber

3,685,261 Wet Scrubber for Contaminated Gas

3,712,412 Sound Suppressing System

3,738,624 Gas Scrubber

3,785,119 Method & Apparatus for Removing Particulate & 

Oxide of Sulfur from Gas

3,795,486 Wet Scrubber

3,811,247 Foam Type Gas Scrubber

3,830,041 Foam Breaker

3,963,463 Foam Scrubber

439,810 Ducon & Design Trademark

707,186 Oriclone Trademark

791,355 Ducon Trademark

933,511 Multivane Trademark

1,068,066 Ventri-Rod Trademark

1,068,479 Hydro-Flight Trademark

1,098,676 Environeering Trademark
Ducon Technologies Inc.

For Tilden Mine 

Proposal No DC12-5173 for a Dry FGD/Baghouse 

System 

The confidential information contained on this page is property of Ducon Technologies Inc. and is for the use of the recipient or their authorized agents. 

Any unauthorized use is strictly prohibited.

Page 5 of 12

2.0 PROCESS & DESIGN PARAMETERS 

The process and project parameters for the Tilden Plant project are as 

follows (reference data from Table 8A, dated 6/14/2012 provided by 

CliffsNR on 9/13/2012):

Gas streams from lines 2C (from the North Stack) and lines 2A and 2B 

(from the South Stack) will be mixed in a common duct and split 50% (by 

others) to two equally sized (50% of total flow) Ducon treatment trains, each 

consisting of a dry absorber and baghouse (including interconnecting 

ductwork, dampers, and expansion joints (between the absorber and the 

baghouse) and including both common and line-dedicated equipment for 

fresh lime (hydrated lime receiving, storage, preparation and delivery to the 

dry absorbers). Ducon’s scope is limited to the equipment (quoted here) 

between the inlet flange to the dry absorber and the outlet flange from the 

Baghouse, Within this scope Ducon will also provide three (3) silos and 

auxiliary equipment for storage, handling and transmission of used lime (for

recycle and disposal). Zachry Engineering Corporation (Zachry) will design 

and provide new ductwork to conduct flue gas from existing north and south 

stacks to a common manifold, and distribute mixed gas equally to inlet 

flanges of two Ducon dry absorber reactors. Zachry will also provide 

ductwork I.D. fans and common Stack for exhaust of clean gas to the 

atmosphere.

Assumed Process Parameters For Each Gas Stream :

Inlet Gas Flow 595,913 acfm 

Inlet SO2 in Gas 366 lb/hr

Inlet Gas Temp F 

Inlet PM to ESP gr/acf

MWw lbs/p-mol

Inlet Humidity

Site Elevation above sea level 1978 ft

Inlet Static Pressure to Dry w.g.

Absorber Reactor
Ducon Technologies Inc.

For Tilden Mine 

Proposal No DC12-5173 for a Dry FGD/Baghouse 

System 

The confidential information contained on this page is property of Ducon Technologies Inc. and is for the use of the recipient or their authorized agents. 

Any unauthorized use is strictly prohibited.

Page 6 of 12

 Assumed Design Parameters For Each FGD Reactor & Baghouse 

Inlet SO2 concentration 366 lb/hr 

SO2 Removal efficiency >90% 

Atomization Air Required @ 6 barg 400 scfm

Air required for baghouse pulse jet @ 6 barg 84 scfm 

Total Water Requirement 648 lbs/min

Exit Gas Temp to Stack 218 F

Exit Gas Flow from Absorber 554,806 acfm

Solids from Baghouse for disposal 778 lbs/Hr

Hydrated Lime Flow to Reactor 9.0 lbs/min

Hydrated Lime usage based on 100% purity

Dust Concentration at Baghouse Outlet mg/NM3 30

System Pressure Drop at scope limits inch w.c. 11”

 

3.0 PRINCIPLES OF OPERATION For EACH GAS STREAM 

 3.1 The gas enters the existing ESPs, where 90% (assumed) of the particulate 

is removed. The SO2 laden flue gas, at F, is introduced into the spray dry 

reactor and is accelerated and spun into the absorber zone. At the same time, a

2-fluid nozzle introduces the measured and controlled amount of lime slurry and 

water for efficient SO2 absorption and controlled flue gas cooling to a design 

specified outlet flue gas temperature. Compressed air @ 6 barg pressure is used 

to insure fine atomization of the liquid droplets.

 

Tremendous interaction between the flue gas and the atomized slurry droplets 

results in drying of the droplets. The SO2 in the gas reacts and forms dry powder 

consisting of CaSO3 and CaSO4 (and lime).

 

The concentration of particles in the spray dry reactor is increased by 

recirculating a measured amount of by-product (CaSO4, CaSO3, etc.) back into 

the absorber from the outlets of the baghouse and spray dry absorber. 

 All the flow streams to the spray dry absorber are under automatic process 

control.

 The flue gas exiting the absorber is sent to the baghouse, with six (6) chambers, 

in parallel. When the pressure drop across the bags in the baghouse reaches a 

predetermined set point, that module is taken off line, and the pulse jet cleaning 

sequence is initiated. 
Ducon Technologies Inc.

For Tilden Mine 

Proposal No DC12-5173 for a Dry FGD/Baghouse 

System 

The confidential information contained on this page is property of Ducon Technologies Inc. and is for the use of the recipient or their authorized agents. 

Any unauthorized use is strictly prohibited.

Page 7 of 12

4.0 SCOPE OF SUPPLY

All equipment furnished by Ducon shall be adequately sized to meet the 

required objectives and shall be suitable for outdoor installation. Equipment 

selection shall be done to minimize the wear and provide long operating life 

with least amount of maintenance and down time. 

The following drawings are being provided and are part of this proposal.

 DC12-5173-03 - PFD

 DC12-5173-04 - GA PLAN VIEW

Ducon's scope of supply shall be as outlined below.

4.1 Hydrated Lime Storage & Slurry preparation system 

A) Common Storage Silo & Slurry Preparation Tank (20% Hydrated Lime)

One (1) storage silo for two gas streams 

Type: Vertical, cylindrical, self standing, w/ 1 hopper.

Capacity (net) 3,568 cubic feet 

Material: ASTM A36

Silo storage capacity: 5 days usable hydrated lime

One common slurry preparation tank and one agitator

Two common slurry pumps – One working and one standby

B) Rotary Air Lock Feeder 

 Quantity: 1 set / each silo

Type: Motorized rotary air lock valve

Material / Thickness: Mild Steel

C) Mixing tanks & agitators 

Quantity: 2 sets 

Type: Mild Steel

D) Slurry pumps with VFD

Quantity: 2 sets / each gas stream 

Material: Stainless 

E) Slurry piping system to two absorbers
Ducon Technologies Inc.

For Tilden Mine 

Proposal No DC12-5173 for a Dry FGD/Baghouse 

System 

The confidential information contained on this page is property of Ducon Technologies Inc. and is for the use of the recipient or their authorized agents. 

Any unauthorized use is strictly prohibited.

Page 8 of 12

4.2 Two (2) Dry Lime FGD recirculating reactors, 

A) Absorber & rotary valves

The absorbers shown on drawing DC12-5173-03 and DC12-5173-04 will be 

provided. Absorber dimensions will be 22’-8 ID, 120’ high, with 60 deg cone 

hopper at the bottom. Ducon whirl vanes will be provided at the vessel’s straight 

side to cone junction to spin the gas to the design spin velocity. Material of 

construction will be 1⁄4” thick carbon steel with 1/16” AL^XN cladding. 

Recommended external insulation consists of 4” fiber wool with 20 ga aluminized 

steel sheathing (by others). A motorized rotary air lock valve will be provided at 

the bottom of the cone. All required structural supports, platforms, all access ways 

and staircase will be provided with the system.

 

B) Injection Lances & nozzles 

 _ Q’ty: 1set for each absorber

C) Silos – Three (3)

- Two recycle silos

- One Disposal silo

 

 

4.3 Fabric Filter System: 

One complete fabric filter system, (consisting of 2 x100% baghouse ) pulse air 

type in modular configuration complete with all controls and instrumentation to 

monitor temperatures, pressures, differential pressures, levels in the hoppers, etc. 

for complete control and operation of the fabric filter including cleaning operation 

as follows:

A) High ratio pulse jet type baghouse fabric filters, Each Baghouse consists of 

Six (6) chambers arranged in one (1) row. Penthouse will be provided on the 

top of each chamber. Casing and manifold are constructed of 1⁄4”. A-36 carbon 

steel plate, stiffened as necessary. The casing includes a 3/8” thick tube sheet 

with a pulse air cleaning system and diaphragm valves. An enclosure (walk-inplenum) is provided on top to allow removal of bags and carry out 

maintenance. The enclosure is made of 1⁄4” thick A-36 plate, with prime and 

finish painting by installation contractor after erection completion. Hopper 

valley angle is 60°. Accessories include 150# ANSI drilling outlet flange, 

strike plates, and poke holes. The hoppers’ bottom area surfaces will be 

electrically heat traced to 90 deg C. 4” of insulation will be providing for entire 

chambers.

 Each module is supported by structural steel legs to grade. Because of the 
Ducon Technologies Inc.

For Tilden Mine 

Proposal No DC12-5173 for a Dry FGD/Baghouse 

System 

The confidential information contained on this page is property of Ducon Technologies Inc. and is for the use of the recipient or their authorized agents. 

Any unauthorized use is strictly prohibited.

Page 9 of 12

 Size of the module, the module will be factory fabricated and shipped in 

 maximum shippable sizes, knocked down, match marked for field erection 

 and welding in the field. Each module contains an array of 17 rows x 25 rows 

 of 10M long filter bags. The following baghouse equipment (for two 

 baghouses) is included:

.

5712 Filter bags, 150 mm nominal diameter,10 M long, of 0.5 kg per 

square meter, PPS 

5712 Bag cages – 20 wire, 11 gage mild steel. and Pulse Jet Venturis

204 - Pulse Jet Diaphragm Valves

204 – Blow tubes

 

12 - Inlet Butterfly dampers with electric actuator operator for automatic 

isolation of module

12 - Outlet Butterfly dampers with electric actuator for automatic isolation 

of module. 

12- Rotary Air Lock to discharge fly ash. 

One Lot of Platforms and Stairs, as required. 

B) Two (2) Solid Recirculation Systems, 

One (1) for each gas stream will be provided. 

4.4. Two (2) Air Compressor/Filter/Dryer Packages for each gas stream, one (1) 

operating, one (1) spare will be provided. Each package will be rated for 

327SCFM @ 6 barg discharge pressure, 70 KW.

4.5 Two (2) lots of system ductwork, one (1) lot per gas stream will be provided as 

shown in drawings DC12-5173-03 and DC12-5173-04. This includes the ductwork 

from the absorber to baghouses. All ductwork will be fabricated with 1/4” thick 

carbon steel structurally reinforced as required. Each duct system shall also 

include fabric type expansion joints as required and as determined by engineering. 

Structural supports and all access requirements are included.

4.6 Two (2) Lots of Instruments, one (1) per each gas stream, will be provided 

as listed below. (Package Units Instrumentation not included) 

For one Lot 

 

GAS SIDE 

Inlet Pressure Transmitter 
Ducon Technologies Inc.

For Tilden Mine 

Proposal No DC12-5173 for a Dry FGD/Baghouse 

System 

The confidential information contained on this page is property of Ducon Technologies Inc. and is for the use of the recipient or their authorized agents. 

Any unauthorized use is strictly prohibited.

Page 10 of 12

Inlet Temperature Transmitter 

Inlet SO2 Analyzer/Transmitter ( by others ) 

Inlet O2 Analyzer/Transmitter (by others) 

Absorber Outlet Temperature Transmitter 

Absorber Outlet Pressure Transmitter 

Level Transmitter in absorber cone 

 Differential Pressure Transmitter Baghouse chamber 1 

Differential Pressure Transmitter Baghouse chamber 2 

Differential Pressure Transmitter Baghouse chamber 3 

Differential Pressure Transmitter Baghouse chamber 4 

 Differential Pressure Transmitter Baghouse chamber 5 

 Differential Pressure Transmitter Baghouse chamber 6 

Gas Flow Transmitter (Flow to fan ) 

Outlet Gas Pressure Transmitter 

Gas Temperature Transmitter 

Pressure Transmitter (Compressor discharge) 

 

 LIQUID SIDE 

 Flow Transmitter to Nozzle (Magmeter) 

 PressureTransmitter (PC Pump discharge) 

 FlowTransmitter Water to Mix Tank(Magmeter) 

 Transmitter lime slurry to MixTank(Magmeter)

4.7 Two (2) Lots of valves, one lot per gas stream will be provided. Valves may 

or may not be shown in the proposal P&ID but all control valves, automatic 

valves, manual valves required for an automatic operating system within the 

scope of battery limits will be provided. 

4.8 Following items are not included in Ducon’s budgetary price 

a. Ductwork from the Tilden Mine ESPs (existing) for each gas stream to the 

inlet of the Ducon reactor, and structural support, expansion joints and inlet 

dampers before the inlet of the reactor.

b. Ductworks from the outlet flange of baghouses to the fan inlet including 

structural support, expansion joints, and dampers after the outlet flange of 

baghouses 

b. Erection and assembly

c. Power and control cabling and cable laying accessories

d. Control panels 

d. Civil design and construction

e. A/C and ventilation system

f. Fire Detection and alarm device.

 g. All Insulation materials and installation

 
Ducon Technologies Inc.

For Tilden Mine 

Proposal No DC12-5173 for a Dry FGD/Baghouse 

System 

The confidential information contained on this page is property of Ducon Technologies Inc. and is for the use of the recipient or their authorized agents. 

Any unauthorized use is strictly prohibited.

Page 11 of 12

5.0 TERMS & MISCELLANEOUS ITEMS

5.1 DESIGN

All materials shall be in accordance with ASTM Standrads, be new, of 

the best quality and suitable for long operating life. All dimensions and 

sizes in this proposal are subject to modification and change upon 

completion of detailed engineering.

5.2 PROJECT SCHEDULE

All basic engineering information, including plot plan, system drawings, 

and foundation details shall be provided within 2-3 months after the 

issuance of purchase order. Individual equipment shipments shall 

arrive at the job site in approx. 10 - 12 months after start date. This 

estimate is contingent upon no delays in purchaser scope of work and 

no unforeseen site problems. Ducon shall not be responsible for delays

caused by reasons beyond its control. Ducon estimates total time to 

install and commission to be approximately 18 to 20 months.

 5.3 PRICES

Total price indicated here is only for the above scope of supply of 

equipment for the Ducon FGD system as outlined in this proposal. It 

does not include any price for erection. 

 

 USD: $25,000,000 [Budgetary] 

Very truly yours,

DUCON ENVIRONMENTAL SYSTEMS
Ducon Technologies Inc.

For Tilden Mine 

Proposal No DC12-5173 for a Dry FGD/Baghouse 

System 

The confidential information contained on this page is property of Ducon Technologies Inc. and is for the use of the recipient or their authorized agents. 

Any unauthorized use is strictly prohibited.

Page 12 of 12


GSA for Pelletizing

Budget Quotation

for

Air Pollution Control Equipment

Cliffs, Natural Resources Inc. , Tilden line 1

9-15-2012

FLS Airtech No. 12-47590 rev. A1
Our ref. Date Page

12-47590A1; Tilden line 1

Tel +1 (610) 264-6600 · Fax +1 (610) 264-6400 · info@flsairtech.com

www.flsairtech-us.com · 

3231 Schoenersville Road · 18017 · Bethlehem, Pennsylvania · USA

Project.

JAS

FLSmidth Airtech Inc.

9-15-2012

Pl f t th d i ht ifi ti i t hi l ifi ti f d t il d i f i t

Budget Offer GSA for Pelletizing

With reference to above-mentioned, we are pleased to submit our initial proposal covering the design and supply of 2

Gas Suspension Absorbers ( GSA) and 2 Fabric Filters ( FF) for SO2 removal for the Pelletizing plant line 2 off-gas

cleaning systems at the Cliffs Tilden plant facility ,Negaunee, Michigan. We have provided budget pricing for the GSA's

and FF's based upon your operation information.

Plant: Tilden line 1

Dear Sir/Madam,

200 Public Square, Suite 3300

Cleveland

OH 44114-2315, USA

Attn. Jason Adams

Cliffs, Natural Resources Inc. 

Project No: 12-47590A1

We kindly ask you to review our detailed technical specification and preliminary layout drawing to ensure that we have

designed the equipment according to your requirements, and that the scope of supply meets your expectations.

Please refer to the summary and weight specification in our technical specification for a detailed view of equipment

included in our proposal; items marked FLS-AT are key-parts, items marked FAB are fabrication parts, both supplied by

FLS Airtech, while items marked BCL and CLIENT are supplied by others.

The GSA Towers and the FF units hopper and penthouse area are provided with structural steel for installation of

Purlins & Girts (by others). Insulation, Siding/Cladding are not included in our proposal.

Offering two independent GSA units /FF units increases the operation range as the turndown ration is max. 50% of

maximum design gas flow for each GSA unit.

Offering 2 FF units prevent low flow problems in FF chambers and ducting and minimize operational problems when

operating with gas temperatures close to the water dew points .
Our ref. Date Page

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www.flsairtech-us.com · 

3231 Schoenersville Road · 18017 · Bethlehem, Pennsylvania · USA

Project.

JAS

FLSmidth Airtech Inc.

9-15-2012

For regulating the 2 uneven gas volumes from the South Stack and the North Stack into 2 identical parallel GSC -FF

lines. We have assumed upstream regulating Dampers (by others) please see attached flow sheet D1504689.

Direct fax number:

Contact person:

We have sized the FF's for a particulate emission of 10 mg/Nm3 dry. 

You will notice that the proposed GSA-FF equipment exceed the initial given building envelope. FLS has proposed the

GSA-FF with standard equipment lay-out. The FLS equipment foot-print arrangement to be discussed. For example 1

large FF instead of the proposed 2 FF's , there will be cost savings ,but it will depend of the building envelop if a 1 FF

unit can be fitted in.

We have sized the GSA's for a SO2 emission of 5 ppmv. 

We trust that you will find our proposal of interest and should very much welcome the opportunity of working with you on 

this project.

Meanwhile, you are most welcome to contact us :

Position:

+1 (610) 264 6400

Jeppe Albert Sørensen

Product Specialist

jeppe sorensen@flsmidth com

+1 (610) 264 6462

E mail address:

Direct telephone number:

For FLS scope of supply please also see the attached Flow sheet No. D1504689 & D1504690 and D1504691 which

also indicate the limits of FLS supply. 

Jacob Søndergaard Jeppe Albert Sørensen

Direct telephone number:

jeppe.sorensen@flsmidth.com

Jacob Søndergaard

 - in case Jeppe Albert Sørensen is not available, please contact Jacob Søndergaard:

E-mail address:

FLSmidth Airtech Inc.

jacob.sondergaard@flsmidth.com

Position:

We look forward to working with you on this project.

Manager of Sales Product Specialist

Yours sincerely,

E-mail address:

Contact person:

Direct fax number:

+1 (610) 264 6225

+1 (610) 264 6400

Manager of Sales

Typical project time schedule

Attachments:

GSA Drawings , typical

Preliminary flow sheet .
Our ref. Date Page

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Tel +1 (610) 264-6600 · Fax +1 (610) 264-6400 · info@flsairtech.com

www.flsairtech-us.com · 

3231 Schoenersville Road · 18017 · Bethlehem, Pennsylvania · USA

Project.

JAS

FLSmidth Airtech Inc.

9-15-2012

Item Qty.

Gross 

weight 

mTon

1 2 296.0

2 2 1473.4

Our proposal includes the following:

Description

 3,670,400 

 2 off GSA/R 6.5/2C7.1

Total 

USD

GSA , FLS-AT type: 5,010,500 

 2 off GSA/R 6.5/2C7.1

Pricing

Pelletizer off gas line, GSA

Key-parts (mechanical and electrical) and engineering for 

fabrication parts (steel parts).

GSA , FLS-AT type:

[Items marked FLS-AT in our Technical Specification]

1769.4 8,680,900 Total Budget price delivered FOB, according to Incoterms 

2000, including packing.

[Items marked FAB in our Technical Specification]

Fabrication parts (steel parts), excluding insulation and 

cladding materials (purchase specification included).
Our ref. Date Page

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www.flsairtech-us.com · 

3231 Schoenersville Road · 18017 · Bethlehem, Pennsylvania · USA

Project.

JAS

FLSmidth Airtech Inc.

9-15-2012

Item Qty.

Gross 

weight 

mTon

3 2 205.0

4 2 755.4

Our proposal includes the following:

 2,588,000 

FC-TD / PJ /4752 / 8x127 / ((11x2)x18)x2/6/P4/P6/6A

Total 

USD Description

Fabrication parts (steel parts), excluding insulation and 

cladding materials (purchase specification included).

Fabric Filter, FLS -AT type:

Fabric Filter, FLS -AT type:

 1,732,000 

[I k d FAB i T h i l S ifi i ]

[Items marked FLS-AT in our Technical Specification]

Pelletizer off gas line, FF

Key-parts (mechanical and electrical) and engineering for 

fabrication parts (steel parts).

Total Budget price delivery FOB, according to Incoterms 960.4

2000, including packing.

Total Budget price for GSA's and FF's delivery 13,000,900 

FOB, according to Incoterms 2000, including 

packing.

2729.8

 4,320,000 

[Items marked FAB in our Technical Specification]
Our ref. Date Page

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www.flsairtech-us.com · 

3231 Schoenersville Road · 18017 · Bethlehem, Pennsylvania · USA

Project.

JAS

FLSmidth Airtech Inc.

9-15-2012

2 months

6 months

7 months

10 months

9 months

Prices for delivery of equipment labeled FLS-AT are quoted FOB European &Indian Port of Export, delivery (liner

terms) in accordance with Incoterms 2000 Seaworthy packing is included when necessary Stowage in containers in

Maintenance & operation manuals:

Commercial terms

Contingent upon the present capacity and delivery conditions, we propose the following preliminary time schedule, 

which is calculated from the date of “Effective Contract”. The time schedule is prepared under the assumption, that all 

necessary information is available for FLSmidth Airtech when needed, and that arrangement drawings are approved 

within one (1) week of submission:

FOB delivery of equipment:

Time of delivery

GA & Load drawings:

Erection manuals:

Drawings for local manufacture:

Terms of delivery

Scope of supply

The scope of supply is according to our enclosed ''Supply & Weight Specification''.

Validity

terms) in accordance with Incoterms 2000. Seaworthy packing is included when necessary. Stowage in containers in

the case of container-line shipment, SOC, and port storage charges (if any) are excluded. 

Prices for delivery of equipment labeled FAB are quoted FOB Indian and or Chinese port of export , delivery (liner

terms) in accordance with Incoterms 2000. Seaworthy packing is included when necessary. Stowage in containers in

the case of container-line shipment, SOC, and port storage charges (if any) are excluded. 

Our proposal is fixed and firm as indicated above, conditioned on negotiating mutually acceptable terms and conditions.

However, we reserve the right to adjust our price against variations in the ratio of exchanging USD for EUR in the spot

currency markets in excess of 1.32 USD for 1.00 EUR. The applicable percentage of our total equipment price subject

to this adjustment is 100% .

Our offer is based on the currently quoted delivery times and pricing structure for carbon steel plate, rolled steel

sections and similar. Should either of these change prior to order and / or during contract execution, we reserve the

right to adjust our pricing and / or delivery time to reflect such changes.

Our proposal expires Monday, 15th October 2012.
Our ref. Date Page

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www.flsairtech-us.com · 

3231 Schoenersville Road · 18017 · Bethlehem, Pennsylvania · USA

Project.

JAS

FLSmidth Airtech Inc.

9-15-2012

20%

80%

Terms of payment

FLSmidth Airtech's right to Suspend

of the total price shall be paid in installments corresponding to the scheduled shipments against the

presentation of an invoice accompanied by shipping documents or a Certificate of Readiness, in the event

shipments cannot take place for reasons not attributable to FLSmidth Airtech.

Overdue payments

The L/C will be subject to the “Uniform Customs and Practice for Commercial Documentary Credits (1993 Revision),

International Chamber of Commerce (Publication No. 500)”. All bank charges, stamp duties, confirmation charges or

other dues, if any, must be paid by the client.

of the total price shall be paid as a down payment directly to our bank account. Payment must be made no

later than thirty days from the date of order against our advance payment bank or insurance company

guarantee. The advance payment guarantee is to be valid until delivery of equipment.

The second installment is covered by an irrevocable letter of credit issued by a first class bank, confirmed by and made

payable in a bank nominated by FLSmidth Airtech. It must be opened within thirty days from the date of order, and be

valid until all payments have been effected in full.

Interest on overdue payments will be calculated as the official CIRR interest rate for the relevant currency plus 5%

points.

The time schedule shall be revised due to the suspension of the work and cost incurred to FLSmidth Airtech as a result

of the suspension shall be paid by Client, inclusive of profit.

In case any accumulated suspension of the work due to Client's delayed payments has lasted more than 90 days, or

the work has been suspended more than 2 times FLSmidth Airtech has the right to Cancel the Contract and immediatly

stop all work on the Contract inclusive work under progress by the subsuppliers.

FLSmidth Airtech's right to Cancel

Client shall pay for equipment delivered, as well as any and all costs resulting from the cancelling of the order, including

but not limited to profit. Equipment already delivered shall remain/become the property of Client.

In case any of Client's payments are delayed more than 30 days, FLSmidth Airtech can suspend the order execution

and stop eventual work under progress by the subsuppliers. When the delayed payment has been received, FLSmidth

Airtech will resume the orderwork as soon as possible in order to minimise eventual delays and costs resulting from the

suspension.
Our ref. Date Page

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3231 Schoenersville Road · 18017 · Bethlehem, Pennsylvania · USA

Project.

JAS

FLSmidth Airtech Inc.

9-15-2012

1) 

Bonds / Guarantees

Per Diem Rate for supervision USD 1250/man/day, which is the net receivable to us, i.e. excl. local taxes. The

basis of the calculation is to be from the date of leaving home base to the date of returning to home base.

Countries of origin

Effective date of contract

Effective date of contract is defined as the latest of the following events: a) the date when the down payment has been

transferred to our account, or b) the date when a Letter of Credit in a form acceptable to FLSmidth Airtech has been

opened (and confirmed).

Supervision services

For the purpose of local manufacture, erection or commissioning, we will dispatch our specialists on the following

conditions (valid 2008):

In case the date of Effective Contract is dalayed by more than 60 days after the Contract was signed, FLSmidth Airtech

has the right to adjustment of prices and delivery time as a result of the delay.

Guarantees issued by FLSmidth Airtech in favor of Client may not be drawn upon unless Client's claim of a default by

FLSmidth Airtech with reference to the Contract can be substantiated and deemed justified by the Adjudicator or FLS

Airtech gives written concent hereto .

Expected countries of origin (but not limited to): EU, Eastern Europe, India, Indonesia, China, and the Americas.

2)

3) 

Other conditions are in accordance with the attached ''Conditions covering the services of FLSmidth Airtech personnel.''

The daily rate is based on the working hours and days which are normally applicable to the Client's or the

Enduser's employee's of similar rank. However, maximum of 8 hours of work per day and on an average of 40

hours per calendar week. Overtime will be charged at USD 220/hour if 8 hours/day or 40 hours/week are

exceeded.

Expenses to be borne by Client: Round-trip business class air ticket from home base to the site, meals and

lodging according to West European standards, and local transportation.

Payment for supervision services is on a monthly basis and is due 30 days after the date of the invoice. Payment is to

be covered by an irrevocable and confirmed L/C, which is to be opened by Client before the FLSmidth Airtech

personnel arrives at site.
Our ref. Date Page

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3231 Schoenersville Road · 18017 · Bethlehem, Pennsylvania · USA

Project.

JAS

FLSmidth Airtech Inc.

9-15-2012

Unless settled amicably, any dispute or difference which arises between FLSmidth Airtech and Client shall be referred

by either party to adjudication in accordance with the ''Rules for Adjudication'' (the Rules). The adjudicator shall be any

person agreed by the parties and shall not be nationals of OH 44114-2315, USA or USA/Denmark. In the event of

disagreement the adjudicator shall be appointed in accordance with the Rules

Disputes

Taxes, duties and VAT

If a Party is dissatisfied with the decision of the adjudicator or if no decision is given within the time set out in the Rules,

Should project changes be necessary, then the scope of supply, the pricing and the delivery schedule might have to be 

revised.

Weights and units

Our quotation does not include any kind of tax, duty, VAT or other charges levied by authorities outside country of 

origin.

The weights and units provided in our proposal (''Supply & Weight Specification''). are estimates and will be confirmed

upon completion of the detailed engineering.

The prices and delivery times assume that Client does not make any changes to the project after the effective contract 

date.

Changes after contract

the Party may give notice of dissatisfaction within 28 days of receipt of the decision or the expiry of the time for the

decision. If no notice of dissatisfaction is given within the specified time, the decision shall be final and binding for the

Parties. If notice of dissatisfaction is given within the specified time, the decision shall be binding on the Parties who

shall give effect to it without delay unless and until the decision of the adjudicator is revised by an arbitrator.

Any dispute which has been the subject of a notice of dissatisfaction shall be finally settled under ICC's Rules of

Arbitration. Court of arbitration shall be set in neutral country other than OH 44114-2315, USA or USA/Denmark. The

arbitrators shall not be nationals of neither OH 44114-2315, USA, USA or Denmark.
Our ref. Date Page

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3231 Schoenersville Road · 18017 · Bethlehem, Pennsylvania · USA

Project.

JAS

FLSmidth Airtech Inc.

9-15-2012

All emission testing to be performed after the Fabric Filter. 

mg/Nm3

The performance guarantees are based on the equipment being operated at the design operating conditions below:

GSA Type: 2 off GSA/R 6.5/2C7.1

Estimated performances 

Estimated Performance

14

Dust emission 10 10 mg/Nm3 (dry)

14

Normal flow Max. flow

The following describes our performance and equipment guarantees:

SO2 emission

12 months

Equipment Warranty

GSA Type: 2 off GSA/R 6.5/2C7.1

Equipment supply

*

mg/Nm3, dry

Nm3/h, wet

150.00

9.0

deg C

GSA Type: 2 off GSA/R 6.5/2C7.1

Gas flow each GSA

vol% O2 dry

1,269,391

-608

149

The performance guarantees are based on the equipment being operated at the design operating conditions below:

Normal flow Max. flow

Measurement or verification of the gas flow rates stated in the Operating Conditions must be done with a pitot static tube e.g. according to the 

following standards :

Water content 10.5 vol% H2O

CFR Promulgated Test Methods (TM) 10/17/00, Feb. 2000, Method 2 ‘Determination of Stack Gas Velocity and Volumetric Flow rate 

(Type S pitot tube).

mmWG

Dust content in flue gas

Operating Conditions of GSA , 

mg/Nm3, dry

Gas temperature

Operating pressure

SO2 content

Oxygen content

10,000
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Project.

JAS

FLSmidth Airtech Inc.

9-15-2012

mg/Nm3

mg/Nm3

Particles, class 3

6

Oil, class 3 max 1

max 5

Dew point

Compressed air pressure required

GSA Type: 2 off GSA/R 6.5/2C7.1

Quality of Compressed Air:

The warranty period is 12 months from the initial start-up date for all material and workmanship; however, it is not longer 

than 18 months after shipment of the equipment. All equipment supplied by FLSmidth Airtech is guaranteed to be

composed of first-class materials throughout and be of good and careful workmanship. Therefore we warrant to correct

and make good any defect, which may develop under normal and proper use within the guarantee period - or any

defects, which are due to faults in the design, the materials or the workmanship - provided that we are notified

immediately after the defect is discovered, that such defective parts are properly returned to us or that we may have the

option of repairing the defective part on site if feasible. The warranty period for such repaired part or replacement part

shall be valid for 12 months from the date of re-delivery of such part. Notwithstanding the aforementioned, all

obligations of FLSmidth Airtech under this warranty will expire 36 months after the initial date of delivery.

Moreover, the guarantees are given according to the enclosed general conditions.

All liability on our part ceases when the warranty period terminates or in the event of misuse or failure to operate and

maintain the equipment in accordance with our instructions Our liability in all cases is limited to the aforementioned

Equipment Warranty

Cleaning type

DegC

bar

Semi Off / On line cleaning

-20

maintain the equipment in accordance with our instructions. Our liability, in all cases, is limited to the aforementioned

conditions and does not extend to consequential damages, either direct or indirect.

FLSmidth Airtech's total liability shall under no circumstances exceed 10% of the contract sum. Client's remedy or

remedies against FLS Airtech and/or FLS Airtech's liability relating to the performance of the warranties hereunder shall

be solely and exclusively limited to those as provided herein.

General

Our equipment warranty and guarantees are valid provided that the local manufacture and erection works are approved

by FLSmidth Airtech. The installation must be installed, maintained and operated in accordance with the instructions of

FLSmidth Airtech. FLSmidth Airtech's liability for reworking, repair and replacement of defective items until the expiry of

the warrenty period shall be limited to the same scope of supply and terms as the main supply contract.
Our ref. Date Page

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www.flsairtech-us.com · 

3231 Schoenersville Road · 18017 · Bethlehem, Pennsylvania · USA

Project.

JAS

FLSmidth Airtech Inc.

9-15-2012

If, at the test, the GSA does not fulfil the performance guarantee, FLSmidth Airtech shall be given sufficient time to

investigate the reason and to make the necessary changes. Hereafter, one - or more if deemed essential by FLSmidth

Airtech - repeated test(s) shall be carried out according to the same procedure as with the first test.

At the time of contract the method of gas ,heavy metal emission guarantee testing shall be selected and mutually 

agreed upon.

Performance guarantee test

Due to existing measurement tolerances, the Performance Guarantee Test shall be deemed fulfilled even if the

measured / calculated emission is within 5% of the guaranteed maximum emission. Client may at his own expense

have the test conducted by an independent qualified company or government agency.

Guarantees

The SO2 emission shall be calculated as an average (arithmetic mean) of not less than three (3) valid individual

measurements performed during a maximum period of three (3) substantially consecutive days of operation. Each test

should be longer than two (2) and less than eight (8) hours duration as required by the selected sampling method at or

below the design operating conditions. The test shall be performed not later than two (2) months after commissioning

the plant. If the test has not been performed within three (3) months from the time of start-up or twelve (12) months from

date of delivery, whichever occurs first, for reasons not contributable to FLSmidth Airtech, the performance guarantees

shall be deemed fulfilled.

*

* FLSmidth Airtech must be notified in writing at least two weeks prior to the intended test date.

*

*

*

* Stable plant operation is defined as attainment of normal volume rate and temperatures at the inlet to the

GSA, after load or process mode changes.

If the duct work is not part of our scope of supply, FLSmidth Airtech must approve the lay-out of the inlet and

outlet duct work to and from the GSA and the location and design of the test ports to be used for performing

the guarantee test.

Moreover, the guarantee is subject to the following provisions:

FLSmidth Airtech is allowed to observe the guarantee test which must be performed by an experienced,

impartial authority chosen jointly by Client and by FLSmidth Airtech.

The plant is in normal and stable operation for a minimum of 4 hours prior to, as well as during, the entire

guarantee test. 

FLSmidth Airtech is allowed 24 hours in advance of the guarantee test to adjust the controllers. During this

period the plant should be in a normal operating mode.
Our ref. Date Page

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Tel +1 (610) 264-6600 · Fax +1 (610) 264-6400 · info@flsairtech.com

www.flsairtech-us.com · 

3231 Schoenersville Road · 18017 · Bethlehem, Pennsylvania · USA

Project.

JAS

FLSmidth Airtech Inc.

9-15-2012

*

*

*

*

*

*

*

Client immediately investigates and corrects any significant deviations from normal operation such as

increased, GSA differential pressure, dust emission, or oxygen level. Similarly if process variations cause dust

build-ups or corrosion to occur, the cause is immediately investigated and remedied.

The compressed air quality being as specified.

FLSmidth Airtech has the GSA available for inspection during the annual maintenance stop for at least 5

consecutive days.

The GSA installation is operated and maintained according to the FLSmidth Airtech’s operation and

maintenance manuals and to other written instructions given by FLSmidth Airtech.

General

Client informs FLSmidth Airtech of all maintenance or problems arising from the GSA without reasonable

delay.

This guarantee is valid provided that the above mentioned and the following provisions are fulfilled:

Client or Tilden line 1 has the recommended spare parts available.

All liability on our part ceases when the guarantee period terminates or in the event of misuse or failure to operate and

maintain the equipment in accordance with our instructions. Our liability, in all cases, is limited to the aforementioned

conditions and does not extend to consequential damages, either direct or indirect.

Limitations

Client or Tilden line 1 must maintain daily records of the actual operation conditions for those items specified

in the design conditions in the design conditions.
Our ref. Date Page

12-47590A1; Tilden line 1

Tel +1 (610) 264-6600 · Fax +1 (610) 264-6400 · info@flsairtech.com

www.flsairtech-us.com · 

3231 Schoenersville Road · 18017 · Bethlehem, Pennsylvania · USA

Project.

JAS

FLSmidth Airtech Inc.

9-15-2012

*

*

*

*

*

*

*

*

*

*

*

*

*

*

Supervision services (quoted separately as a daily rate).

Performance Guarantee Test to be carried out by an impartial third party or official authority .

Test and Certification of filter casing as pressure vessel

Scada control system.

Finish painting on site.

Erection consumables of any kind.

Design, engineering, delivery or erection of ducts or expansion joints connected to the inlet or outlet flange of

the FFand GSA 

MCC controlcenters or PLC for start or interlocking of the ash transport machines in and outside the GSA 

Please note that our offer does not include:

Exemptions

Adequate housing for local control panels.

Our Budget proposal includes only the Items and Services specifically mentioned in our pricing sheet and the attached

technical specifications.

Civil works of any kind.

Delivery of any kind of Insulation and cladding materials or systems/part for their erection.

Electrical erection inclusive of delivery of cables, cable trays, cable glands, local start/stop switches,

emergency stop etc.

Process control equipment of any kind

Mechanical erection.

*

*

*

*

*

*

*

*

Permanent lighting for the installation.

Fire control or fire alarm systems.

Please note that our offer is made with the following provisions:

Flight warning lights.

Engineering, documentation, etc. are offered according to FLS Airtech Standard.

The 2 GSA's and 2 Fabric Filters are ordered as one package.

Applications, approvals or any other type of authority orientation or contact in the country of the plant are

handled by Client.

General Site Earthing system for connection to the filter.

Lightning protection.

Provisions
Our ref. Date Page

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www.flsairtech-us.com · 

3231 Schoenersville Road · 18017 · Bethlehem, Pennsylvania · USA

Project.

JAS

FLSmidth Airtech Inc.

9-15-2012

Local leave under special circumstances shall be agreed upon by Client and FLSmidth Airtech.

Working hours

The FLSmidth Airtech personnel will, upon arrival to site, contact the head of safety department for instructions.

Services of FLSmidth Airtech Personnel

Working hours are to be the same as those normally applicable to Client’s or Enduser's staff at the plant but, on

average, not exceed 8 hours per day and 40 hours per calendar week.

Overtime is normally to be avoided. If over-time is necessary, it will be charged for or, alternatively, the FLSmidth

Airtech personnel is to be granted time off corresponding to the amount of overtime worked before departing from the

plant.

Client shall apply for and obtain a visa, residency and work permit. If necessary, FLSmidth Airtech shall apply for and

Visa and work permit

Leave

Safety on site

The fee for the FLSmidth Airtech personnel includes salary during accumulated annual leave. Such leave should be

taken after completion of the work concerned, unless otherwise agreed upon by the Client and FLSmidth Airtech.

Exit and re-entry visa when applicable are to be obtained by Client. All costs in connection with obtaining visa/work

permit are for Client’s account.

Payment to FLSmidth Airtech

Client to provide, free of charge, a fully furnished house/flat to applicate European standards, suitable for the

accommodation of the FLSmidth Airtech employee and his family.

According to our Commercial terms.

Accommodation

obtain an entry visa supported by Client.
Our ref. Date Page

12-47590A1; Tilden line 1

Tel +1 (610) 264-6600 · Fax +1 (610) 264-6400 · info@flsairtech.com

www.flsairtech-us.com · 

3231 Schoenersville Road · 18017 · Bethlehem, Pennsylvania · USA

Project.

JAS

FLSmidth Airtech Inc.

9-15-2012

FLSmidth Airtech shall remain responsible for all costs resulting from personal injury to the FLSmidth Airtech employee,

and will indemnify Client in respect of such costs, except where such injury is due to fault or negligence on the part of

Client or Enduser, their servants or agents.

Replacement

Personal injury to FLSmidth Airtech employee

Client will arrange for a PTA (Prepaid Ticket Advice). When arrangements have been made, Client must inform

FLSmidth Airtech by forwarding the reservation numbers/reference numbers as well as name of airline.

FLSmidth Airtech shall at all times have the right to replace a FLSmidth Airtech employee by another person equally

If, owing to illness, the FLSmidth Airtech employee is absent from work, Client shall pay all costs as previously

specified. In the event of such absence exceeding three weeks, FLSmidth Airtech will, if requested by Client, replace

the FLSmidth Airtech employee concerned and meet all travelling costs involved.

Illness

Transport

Client shall defray travelling costs from the FLSmidth Airtech employee’s base station to the site and return and all

costs of excess luggage relating to tools and equipment required for the job.

Client will forward an MCO (Miscellaneous Charge Order) covering excess luggage of kg for outward and return 

transport.

Flight tickets shall be fare (non-restricted) tickets valid with an international airline on business class or similar class.

The FLSmidth Airtech employee shall at all times be under FLSmidth Airtech’s instruction, and FLSmidth Airtech shall

only be held responsible for direct losses incurred by Client consequent to acts performed in accordance with advice

given by an FLSmidth Airtech employee which proves incorrect.

Client shall at all times be liable for damage to plant or property and consequential losses, and shall be liable for

sickness, injury, and death of any person arising out of the services of the FLSmidth Airtech employee provided he has

duly fulfilled his obligations.

Client shall pay all costs in connection with the above requirements and shall pay or reimburse all taxes levied on

FLSmidth Airtech or the FLSmidth Airtech employee.

Damage to works

Insurance and taxes

Client shall arrange and pay for any social security contributions, workmen’s compensation insurance, and the like, as

required by applicable local laws.

suited for the job. Replacement costs shall be borne by FLSmidth Airtech.

Client shall indemnify FLSmidth Airtech and the FLSmidth Airtech employee against any claims, costs, losses, charges,

or proceedings whatsoever arising out of the above liabilities. It is the obligation of Client to cover such risks by

insurance.