Cliffs Natural Resources ready to produce new kind of iron ore pellet

A company that operates three taconite mines in northeast Minnesota says it is ready to produce a new kind of iron ore pellet that could potentially open new markets.

Cliffs Natural Resources says it successfully ran a two-week long, full-scale production test of direct reduced iron-grade pellets at its plant in Silver Bay last month. The test produced 30,000 tons of the pellets.

Direct reduced iron is low in silica and used to make steel in smaller electric arc furnaces, typically called mini-mills. Taconite pellets from the Iron Range have historically fed traditional blast furnaces around the Great Lakes. In a conference call with investors, Cliffs CEO Joseph Carrabba said the company could now be poised to supply electric arc furnaces.

"The EAF market is one we've never meaningfully supplied. This could change," Carrabba said.

The company still has yet to find a customer for the new kind of pellets, Carrabba said, but it is well positioned to supply future DRI plants built in the region.