2018 CLEVELEND-CLIFFS HIGHLIGHTS

$2.3 billion

CONSOLIDATED REVENUES

$766 million

EBITDA
Earnings Before Interest, Taxes, Depreciation, Amortization

$1.1 billion

ADJUSTED NET INCOME

2,926

EMPLOYEES

CLIFFS COMPLETING CONSTRUCTION, HIRING STAFF TO RUN NEW HBI PLANT

Cleveland-Cliffs Inc. is stockpiling iron ore at its new plant in Toledo, Ohio. The piles of pellets are slated to become high-grade, hot briquette iron (HBI) to feed electric arc furnaces (EAF) to make steel.

The plant, scheduled to open in June 2020, is impacting iron ore trade for carriers and steel mills in the Great Lakes/ St. Lawrence Seaway system. Regional production of the HBI could replace pig iron imports from Russia, Ukraine and Brazil. Both pig iron and HBI are used in modern steel production, augmenting the use of scrap steel.

Beginning with mines

Cleveland-Cliffs owns five mines: three in northern Minnesota and two in Michigan’s Upper Peninsula. Northshore Mining in Silver Bay, Minnesota produces about 5.6 million tons of magnetite annually. The taconite is moved 47 miles by rail to a pellet plant on Lake Superior. From there, it is loaded in ships for delivery to mills in the Lower Lakes.

DID YOU KNOW? STEEL IS…

A permanent material that can be infinitely recycled without loss of quality.

Continually evolving as new production processes are developed.

More than 3,500 grades of product with different physical, chemical and environmental properties.

Long-lasting, with an average product life of 40 years before reuse or recycling.

A primary component in almost every greenhouse gas mitigation technology.

In preparation for the $830 million HBI plant, Cliffs upgraded Northshore Mining, adding equipment to create a new product—low-silica, directreduced (DR) grade pellets. The $100 million mine investment improved the concentrator building and added a new scavenger building, conveyor systems, limestone tank and steam generating plant to support large-scale commercial production.

The expansion was complete in August 2019. The mine now produces two types of pellets, the original type used in blast furnaces and DR grade for use at the HBI plant—and potentially other customers. The products are segregated.

Northshore is the only U.S.-based iron ore facility producing this type of pellet, and Cliffs contracted to have about 800,000 tons of them shipped to the plant in 2019. Northshore Mining has the capacity to produce up to 3.5 million tons of the new pellet annually—supporting workflow for the operation’s 529 employees into the future.

Lourenco Goncalves

Lourenco Goncalves

According to Cliffs Chairman, President & CEO, Lourenco Goncalves, 68 percent of American steel production is done with electric arc furnaces, which do not use the mine’s original pellets. The upgrade is expected to keep the mine relevant for 100 years and be the sole source of pellets for the Toledo plant.

Cliffs’ five regional mines produced 26.3 million tons of pellets in 2018, representing 55 percent of total pellet production in the United States. Of that amount, almost all—nearly 25 million tons—were transported to U.S. and Canadian steel mills by domestic fleets.

 

Evolving with demand

Modern steelmaking starts with taconite pellets. Over the years, demand for pellets used in blast furnaces has fallen and demand for DR-grade pellets increased.

In 1990, 63 percent of the mills used blast furnaces, with 37 percent using EAFs. Today, the split is nearly opposite, with 32 percent using blast furnaces and 68 percent using EAFs.

Clifford Smith

Clifford Smith

According to World Steel Association, more than 75 percent of the existing 3,500 grades of steel in use today didn’t exist 20 years ago. These evolving grades and the demands for them are pushing for new production processes—like Cliffs HBI plant.

The plant expands Cliffs’ market to EAF steelmakers. Its location is in close proximity to multiple EAF steel producers.

“We will be downstream of Great Lakes and can ship HBI year-round, shortening supply lines to the customers,” said Clifford Smith, Cleveland- Cliffs Executive Vice President, Chief Operating Officer. He confirmed plans to continue to use vessels to bring DR pellets to the plant and then to move HBI to end-users.

“We will be turning about 2.8 million tons of pellets into 1.9 million metric tons of HBI per year and flowing it through to our customers,” he added.

 

Impacting Toledo

Joeseph Cappel

Joeseph Cappel

While the overall tonnage moving on ships will be similar to past years, officials at the Toledo-Lucas County Port Authority expect major economic impacts from its new resident at Ironville
Terminal.

“While the total economic impact of this project is not yet quantified, we know it will be enormous,” said Joseph Cappel, Vice President of Business Development at the port authority. “Driving up and down Front Street, you get a sense of the magnitude of the project. Every open area is filled with contractor parking lots and laydown areas for steel and components that will eventually be installed at the project site. A steady stream of trucks can be observed shuttling materials in and out of the new plant that includes a tower that can be observed from miles around. We saw the world’s largest crawler crane arrive on several hundred truckloads and get assembled, utilized and disassembled over the summer. The first vessel loads of iron ore have been delivered, creating stockpiles that will soon be transformed into the first batches of HBI.”

“Meanwhile, new roadways and intersections are being constructed along with offices and other buildings ancillary to the production facility,” Cappel added. “It is like watching a gigantic ant farm taking shape with each member of the colony knowing exactly what needs to be done to keep the project on schedule.”

The activity and erection of the 457 foot furnace reactor tower are changing
Toledo’s landscape. The current and long-term impact is made possible, at least in part, by a public-private partnership between the port authority and Midwest Terminals—established to prepare the brownfield for a large-scale industrial user in need of marine and rail access.

Infrastructure upgrades like the installation of natural gas and creating an active marine dock were made.

“You don’t see new maritime terminals popping up every day and redeveloping the property took a significant commitment,” Cappel said, noting that having the marine dock, rail and other infrastructure in place made all the difference when Cliffs was evaluating competing sites.

Mills in the Great Lakes/St. Lawrence Region

Ramping up

Nearly two years into the process, the HBI plant is nearing the end of construction. As part of construction, five ships of structural steel were brought in from offshore. The remainder of the patented equipment was sourced from throughout North America. Most arrived on trucks.

About 1,000 employees have been assembling those components. By midyear, 160 people will be running the plant.

The plant is highly automated, using conveyor belts, enclosed processing, centralized control room and standalone lab. It’s quiet and has a smaller footprint than traditional mills.

“People will see steam coming out the top and that’s about it,” Smith said. “Our process takes place inside closed, pressurized vessels. There are no open molten states.”

The process being used at the HBI plant was developed by Midrex Technologies, which is headquartered in North Carolina and owned by Kobe Steel, Ltd. of Japan.

Midrex plants are designed to minimize water, noise and air pollution—meeting local emissions and environmental standards. ArcelorMittal has commissioned Midrex to design a demonstration plant at its Hamburg, Germany site to produce steel with hydrogen as a renewable energy source. The company designs and engineers the plants.

“We’re building the first Midrex plant in the world with adjustable carbon technology,” Smith said, noting that the plant will use 3 percent carbon to produce a higher value product for EAFs.

The higher carbon content better aligns HBI with pig iron. Cliffs is working to secure contracts with domestic companies using EAFs which are now purchasing pig iron from Canadian mills.

The HBI plant’s design and lifecycle are expected to improve the energy efficiency and lower the carbon footprint of the domestic steel industry. Natural gas and DR-grade pellets are the only raw materials used in the HBI process. No hazardous or toxic by-products will be generated. Water recycling will conserve water use and minimize discharges.

Currently, the plant is being completed and Cliffs is hiring its Toledo workforce. The project is ahead of schedule and could be producing a saleable product in June 2020.

“We’re so proud of the team that is building it and our new workforce that is starting to run various components of the plant,” Smith said.

With global demand of HBI increasing quickly—both from increased use and the Brazilian mining accidents causing lulls in production there—the plant’s regional and global value is yet to be seen. And according to Goncalves, the Toledo plant is just the first of several Cleveland-Cliffs plan to build and operate. ■

MEET THE TEAM

Michelle Cortright

Publisher

Michelle Cortright is Publisher of Great Lakes/Seaway Review and Harbor House Publishers. She purchased the business from her father, diversifying the company into custom publications for chambers of commerce and economic development organizations. It has and continues to assist in regional business growth by creating business magazines, visitor guides and aiding clies with image development.
As Publisher, Cortright oversees every aspect of product creation, which encompasses the editorial and business sides of our print, digital and mobile publications. She meets with clients, which we consider true partners, spearheads business development and is always looking ahead for “the next thing.”
There is often laughter coming from Cortright’s office as she interacts with partners from throughout the Midwest. She is fully entrenched in her labor of love, a company we now celebrate for 50 years of making a difference and supporting families.
She is the mother of an adult son, who is now a business owner in the same town, and is married to Rod Cortright, who pretends to be retired but remains involved as our corporate pilot and jack-of-all-trades.

Tina Felton

Executive Vice President

“For over 20 years, I have had the privilege of being a member of the talented team which produces Great Lakes/Seaway Review. Of utmost importance to me are the people and relationships that I have developed with our stakeholders, advertisers, subscribers and business associates in the Great Lakes/St. Lawrence Seaway maritime industry.
“Growing up in the Great Lakes area, I have always been intrigued by the water and the role it plays commercially, economically and in the quality of life it provides me personally as an avid boater on Lake Michigan. May the legacy of this 50th anniversary edition of Great Lakes/Seaway Review be a catalyst for the next 50 years of inspiration, innovation, advocacy and the development of relationships for advancing the Great Lakes/St. Lawrence Seaway system.”

Janenne Pung

Editor

Janenne Irene Pung has been Editor of Great Lakes/Seaway Review for 16 years. During her time with the magazine, she has represented the company at binational meetings, more fully activated the Editorial Advisory Board, developed new departments and evolved editorial styles.
Prior to joining Harbor House Publishers, Pung worked in mainstream media as a reporter and editor. She then moved into risk communications for the nuclear industry, documenting (visually and in writing) and communicating the process of decommissioning a plant and returning the lakeside property to a natural state.
In addition to being a professional, Pung is a wife and mother. She teaches life skills at a woman’s transition home and is a member of the Charlevoix County Sheriff’s Office Victim Services Unit. In both roles, she helps people work through trauma.

Andrea Lee

Associate Editor

“As a writer for Great Lakes/Seaway Review and Great Laker magazines, part of my job is to tell the stories behind the mighty vessels that sail the Great Lakes—the men and women who crew them, the cargoes they carry, the ports they call on. It feels strangely personal now to see them out on the Lakes. A point of light on the horizon sends me running for my Ship Finder app to discover who she is and where she’s headed. My experience here has given me a much greater understanding of the Great Lakes/Seaway system and a profound appreciation for the people who make it work.”

Cris Shankleton

Creative Director

“For years, Great Lakes/Seaway Review was the monster project in our office that I didn’t have to tackle. When becoming Creative Director, I was nervous about the daunting task of designing the magazine. Since then, the team has worked hard to modernize our look and make the magazine as beautiful as it is informative.”

Jen Shock

Production Manager

“Growing up, the Great Lakes were a place to swim and watch sunsets. After helping produce the magazine, I’ve learned that they are home to an entire network of companies which provide materials that support my everyday life. Each time I send the magazine to press and help prepare the digital edition, I feel a deep sense of accomplishment.”

Leif Hanson

Technology Director

“I’m the guy behind the scenes coding, creating the website and, most recently, designing the magazine’s online archive. I make shipping more visible for our subscribers and advertisers, as well as track global use of our digital products. It’s always a challenge to bring new technologies into a historic industry that’s still known for blue-collar production, but it’s a challenge I enjoy.”

Candi Wynn

Account Executive

“For several years I worked with a Mackinac Island, Michigan-based company and had the pleasure of photographing and taking videos of vessels passing through the Straits of Mackinac, especially the Round Island passage. My love and admiration for them was formed—and continues to grow. I now have the pleasure of working in the maritime industry and understand how important and vital these vessels are to our region and the economy. My goal is to work with our partners in the industry to help us all reach our collective best in the years ahead.”

Bill Wellman

Senior Account Manager

Great Lakes/Seaway Review knits together every aspect of the Great Lakes commercial maritime industry from deckhands to CEOs to ports.”

Jim Fish

Senior Account Manager

“I’ve known the magazine since Volume 1, first as a consultant in St. Paul working with Great Lakes clients and later as the Great Lakes Commission Executive Director, partnering with Jacques LesStrang. The last 30 years, I’ve worked on the inside.
“What makes Great Lakes/Seaway Review different is informed advocacy. Everything in the magazine is informed, factual and researched. We have spearheaded and part-nered in research that led us to advocate for season extension, forgiveness of Seaway debt and removal of tolls, designation of the Fourth Seacoast, recognition and control of invasive species and many other issues benefitting the system today.
“Informed advocacy draws people to Great Lakes/Seaway Review for information and understanding—and it’s what makes it valuable to our advertisers and our readers.”

Kathy Booth

Account Manager

“I’ve been a part of the sales team with this magazine for more than 15 years and, in that time, I’ve learned so much about the importance of our Great Lakes and the St. Lawrence Seaway. But nothing compares to the clients and the relationships we’ve built over the years. Their knowledge and compassion for the maritime industry is amazing. Truly, where would we be without them? Production efficiencies and technology continue to move the industry forward, but it doesn’t happen without all the people we call friends and family.”

Ellen Trimper

Account Manager

“Working on Great Lakes/Seaway Review has taken me from having a simple appreciation of the Great Lakes from a living/recreation standpoint to a deeper understanding of the system and all it encompasses.”

Rex Cassidy

Account Manager

“Any successful business relies on timely, accurate information to stay ahead in their industry. Great Lakes/Seaway Review magazine is a trusted source of news and analysis of information needed by all members of the maritime community.”

Pat Rumpler

Account Manager

“Historically, many of my family members have traveled the Great Lakes as ship captains, first mates and engineers. In fact, I had a family member perish when the Bradley went down in November 1958. As a child, my aunt would take me to the port in Rogers City to watch the ships load and unload their cargo. The mystique and beauty of the Great Lakes have been of particular interest to me.
“For the past 26 years, I have had the privilege of working with this talented team, which truly supports and advocates for the Great Lakes/St. Lawrence Seaway system.”

Sheri Rhoads

Proofreader

“As an advocate for water, a member of Friends of the Boyne River, I appreciate what I learn from the magazine each time I proof its stories. The technology being developed to assure environmental sustainability shows how industry stake-holders live as environmentalists, too.”

Carol Ochs

Office Manager

“I have early childhood memories of my dad loading us in the car on a Sunday afternoon and driving up to the Soo to watch the boats go through the locks, eat ice cream and buy saltwater taffy. I still go several times during the season. I have always loved that you can talk to the sailors on the ships—asking them where they’ve been and what they’re hauling. It’s like the whole world is at your doorstep.”

Jacques LesStrang

Publisher Emeritus

“Lake ports can grow no faster than shipping will permit. Shipping cannot grow beyond the capabilities of the ports. Yet neither has come close to reaching their present potential and will not until the savings in time and in dollars is fully understood by those who make the decisions on how and when and where to move goods. To the ends of development and information, the Seaway Review dedicates itself.”

Dave Knight

Editor from 1985-2003

“Jacques LesStrang, founder of Great Lakes/Seaway Review, had many talents, or “skill sets,” as we say today. But one that served him particularly well throughout his career as a writer, editor, publisher, publicist, etc., was his knack for knowing a good story when he saw it. And the story he recognized in 1969—the 10th anniversary of the opening of the St. Lawrence Seaway—was as good as it gets. In fact, that story was so good it is still being told today, 50 years later.
“The publication created by LesStrang, or “J.L.” as his staff knew him, to mark the Seaway’s 10th anniversary was so well done, and so well received, that it grew legs, as it were, and took off running as a full-color, high-quality quarterly which became the most widely recognized chronicler of the Great Lakes/St. Lawrence Seaway system. Having Great Lakes/Seaway Review continue in that role today speaks volumes about the ongoing commitment of the current Publisher Michelle Cortright to Jacques LesStrang’s vision and high standards. Staying competitive in today’s information scrum is challeng-ing, to say the least, for print media. It requires dynamic, well-researched, topical content presented accurately and in a visually compelling format. In other words, it requires telling a good story. That was true in 1969, it is still true today and nobody tells it better than Great Lakes/Seaway Review.”