Stories in this Issue
Lalich column: University of Minnesota Iron Ore Conference
Iron Ore Industry
Moose
Water Quality: PAH Assessment
Boulder Lake Environmental Center
Forest Products: Cornboard Patent
Peat
Forestry: Mechanical Strip Thinning
Aspen for Furniture
Minnesota Wild(tm) Winery and Gifts
Access to Capital Seminar
Entrepreneurial Development Program
Iron Ore Conference
Kaolin Clay Discovery
Recently the University of Minnesota hosted a conference on Minnesota's iron ore mining industry. The conference celebrated the importance of the industry from a historical perspective and focused on its current and future critical importance to the state and nation. President Hasselmo in his comments on the conference to the University of Minnesota Regents, included on this page, claims that taconite pellet technology is "by far, the most valuable technological process ever transferred from a university laboratory to an industry." The enormity of this statement gives me pause to reflect.
For years in Northeastern Minnesota, it has been common to see trainloads of pellets or huge stockpiles readied for transport to lower Great Lakes ports. Since all these pellets look the same, it is easy to take the technology encompassed in these pellets for granted. In fact, from the perspective of a metallurgical engineer, the technology crammed into these pellets never ceases to amaze me. Pellets shipped 10 years ago would not be competitive in the market from either a quality or cost standpoint today. NRRI has inherited a responsibility to modify and improve this technology for the future.
We must remember that today's pellets are designed to give optimum performance in blast furnaces of integrated steel companies. As a first priority, we have to research modifications and improvements in taconite pellet technology to meet the evolving needs of the blast furnace.
Change on a parallel track, however, is also on the horizon. As integrated producers look at possible conversion to some type of direct steelmaking process and mini-mill producers call for higher purity iron sources, we also need to position ourselves through research and development to be able to provide quality products for these markets.
These are by no means small challenges. But as emphasized by USX's Robert Wargo at the conference, these changes will occur gradually over a period of time. Thus, with a diligent commensurate research effort, we should have time to develop the products and processes to insure a bright future for Minnesota's taconite.
Excerpt from President Hasselmo's report to University of Minnesota Regents
On February 28 and March 1, the University was honored to host a conference entitled "A Discussion of the Minnesota Iron Ore Industry: A New Beginning." The conference was supported by a grant from the Iron Range Resources and Rehabilitation Board, the leadership of Regent Reagan, Senior Vice President Infante, NRRI Director Mike Lalich and Associate Vice President Tony Potami, and a lot of staff work by Florence Funk.
To quote from Jim Infante's letter of invitation, Our goal for this conference is the establishment of a base of knowledge and support that will act as a spring-board for the future development and shaping of the iron ore and steel industry. We are bringing together some of this industry's best minds to explore issues such as technology, research, innovation, environmental concerns, efficiency and productivity, international trade and competition. The conference will present the perspectives of labor, management, government and consumers. Presentations and discussions will center on the industry's efforts to strengthen itself through technological innovation, public-private cooperation, and global competitiveness.
The conference also served as a celebration and reminder of the crucial contributions of Professor E. W. Davis and the University of Minnesota's taconite industry. Professor Davis' work is history; the economic impact of the taconite industry continues: $2 billion paid back to Minnesota in the form of tax revenues; more than a billion dollars still generated every year in the Minnesota economy, with impact on 600 Iron Range companies, 400 Duluth companies, and 700 companies in the Twin Cities and elsewhere in the state; 40 million tons of iron ore produced each year for the U. S. economy.
In terms of the industrial value, economic activity, and tax revenue generated by taconite production, we believe it is, by far, the most valuable technological process ever transferred from a university laboratory to an industry. That's any university, anywhere, public or private.
That process of technology transfer from the University to industry also continues, especially through the Natural Resources Research Institute at UMD and the Mineral Research Laboratory at Coleraine. This conference was an opportunity to reaffirm future partnerships, ensuring that the most productive long-term solution in our history continues to be a long-term solution in Minnesota's future.
"There are no simplistic solutions," said Coleraine director Rod Bleifuss. "If taconite mining is to remain a viable industry in Minnesota, it will have to continue to invest in improved technology. The legislature, management, labor and the University have demonstrated their ability to work together. Continued support of innovative research, directed toward all aspects of the process, from mining to the final pellet or direct reduced iron product is still needed if we are to maintain a successful taconite industry well into the 21st century." Taconite is not only a very low grade ore, it is one of the toughest rocks in the world. We have to mine and process three tons of it for every ton of pellets produced. In addition, we have to remove from one to two tons of waste rock to expose the ore. The amount of taconite mined every two years on the Range exceeds the total earth and rock removed over 20 years in the building of the Panama Canal. This is why it is important to focus more effort on mining technology.
Improved drilling and blasting techniques to increase fragmentation in the mines will lead to lower loading and transportation costs, as well as reduced costs for crushing and grinding. Carried to the limit these improvements could allow continuous loading and belt conveying systems to replace conventional haulage practice. Remote controlled loading and transportation equipment could also lead to decreased costs. These innovations would allow mine engineers to design pits with steeper walls, reduce stripping ratios, increase the potential reserves, and in so doing, extend the life of the industry.
Incremental improvements in the existing concentrating flowsheets, such as improved classification and grinding, magnetic separation and flotation, are under continuous investigation and being implemented in plants whenever possible. However, incremental improvements will not be adequate in the long run. We will have to make some significant innovative moves in mining: improved fragmentation and remote controlled equipment; in crushing: high pressure roller press technology; in processing; gravity upgrading; and in palletizing: low Nox technology. Although we need to support development of director reduced iron technology using Minnesota taconite can only be successful if we produce the high grade concentrate feed required at the lowest possible cost.
"The Minnesota taconite industry is an open book," said Bleifuss. "We are not dead or in the process of dying. We are only in the middle of an exciting book and there are many opportunities ahead."
Scientists will use satellite tracking collars, a high tech first, to learn how the moose survives and even thrives sat the same time that the productivity of its habitat declines.
"By tracking how moose use their habitat throughout the year, we will be able to make predictions enabling forests to remain healthy and support multiple uses," said Pastor.
Previous research indicated that moose eat aspen and birch and avoid spruce and fir. This change in tree species causes soil productivity to drop. Without moose foraging in an area, soil productivity is generally high but more variable.
"This is the first study using satellite tracking collars and a global positioning system to record data rather than the standard tracking collar requiring an airplane following the animal," said Pastor. "This technology allows the moose to roam without human interference providing the most natural data available for researchers. This is the first study in the United States to use global positioning satellites to track animals in their habitats."
Global positioning allows biologists to accurately track moose within 10 feet, the size of a small room. This precision, coupled with a computer model to determine how a moose chooses its eating strategy, will provide researchers with more information available than from any other source. Impacts of the moose on the forests can then be applied on a broader scale allowing natural resource managers the latest information available to maintain the health of the forest.
Six moose were collared by Helicopter Wildlife Management, an internationally-recognized wildlife company from New Zealand, using weighted nets shot from helicopters. No drugs were used to immobilize the animals during the procedure. Average measurements indicated the moose were approximately 10 feet in length and six feet high at the shoulders. If ticks were found, samples were taken and analyzed for Lyme's disease.
"Overall, the moose were very health," said Pastor. "This was an extremely successful operation with a minimum of stress to the animals."
"In this era of declining resources for environmental research and assessment, the current costs associated with sample analysis can quickly deplete these resources," said Chris Owen. "Trends towards developing lower cost, semi-quantitative screening tools have received a lot of attention from regulatory agencies."
Polycyclic aromatic hydrocarbons (PAHs) are a group of compounds from vehicle emissions, vehicle tire wire, creosote or incomplete combustion of wood and oil. In the environment, they may present human and ecological health risks due to their toxicity and known or suspected carcinogenicity and mutagenicity.
A method of screening for PAHs at a fraction of current costs was tested by NRRI in collaboration with Keith Lodge (UMD Chemical Engineering) and Joseph Schubauer-Berigan (University of South California).
"Everyone is looking for an exploration tool that can help delineate contamination areas," said Owen, "and this technique has great potential. Fluorometric assays of petroleum hydrocarbons have been used extensively for many years and researchers at the EPA Lab in Grosse Isle Michigan have been using the technique for coarse screening of sediments."
The method uses relatively inexpensive instrumentation which is available in many state and commercial labs and could be used in the field or on board a ship.
Samples can be tested for total PAHs for about $25 whereas the standard test may cost $250-500 per sample for a complete suite of individual PAHs. For screening purposes, a relatively low value for total PAHs would eliminate the need for the expensive assay.
In an area of approximately 1,000 acres, it would not be unusual to test 250 sites for contamination in order to delineate the contaminated area. Money saved by using the more cost-effective test method could then be applied to better isolating the problem areas and site clean up.
"This is an excellent way to show the relative magnitude of PAH contamination in sediments," said Owen. "With less money spent delineating the area of concern, more is allocated for use in the clean up of sites."
NRRI biologist Kent Montgomery assists buy providing training and research materials for students and teachers to follow. "It's our vision to build a Boulder Lake-based program giving students a 'hands-on' lesson in research," said Montgomery.
Minnesota Power is offering its environmental center participants an opportunity for research at the Boulder Lake Management Area (BLMA). The area incorporates 8,250 acres of land and water around Boulder Lake reservoir and encompasses land owned by Minnesota Power, the State of Minnesota and St. Louis County. There are cross country ski trails, interpretive nature trails and pubic programs such as the upcoming "Boulder Birding Big Day" on May 20. "In 1995, we intend to expand both public programs and opportunities for recreation and environmental education," said Paulson.
Center for Water and the Environment director Jerry Niemi looks to the future for the program. "I would like to apply the latest technology and connect the student-collected data with computer links to classrooms on a regional, national and eventually a global level," said Niemi. "We envision a living laboratory where secondary education students can perform field environmental research and share that knowledge in the classroom through the best available technology."
"With over three million gallons of oil spilled every day in United States factories, shops and garages, the self-contained, one piece board provides a natural alternative to a major environmental problem," said NRRI engineer Brian Brashaw.
Berg was referred to NRRI by the Agricultural Utilization Research Institute (AURI) after he noticed that ground corn stalks absorbed spilled oil. He believed a product could be made from residue and used in the oil clean up market. Brashaw and Berg designed AgriSorb from corn stalk residues.
"We take ideas and bring them to the prototype stage," said Brashaw. "That's what we do best."
Ongoing testing resulted in a unique textured board, which absorbs oil spills in light industrial settings. It also provides a cushioned mat for workers to stand on, easing discomfort and providing safety on oil-soaked concrete floors.
"One square foot of the board will soak up to three quarts of oil and can be incinerated if government regulations permit," said Brashaw. Additional testing at NRRI shows that AgriSorb won't release oil even under 50 pounds of pressure per square inch.
Prototypes are being tested in several locations across Minnesota. In addition to cushioning, the board is withstanding the weight of machinery and maintaining a dry floor.
"Because of the interest generated from preliminary publicity, I've already had calls from potential investors, suppliers of corn residue, distributors and cities," said Berg. "First I'm working with NRRI on establishing a business plan with a complete economic evaluation of the product and potential markets. This business will be set up with all the planning in place so there won't be any surprises when we get into production."
The development of CO-PAK's Agrisorb is funded by Minnesota Technology, Inc. with assistance from AURI.
Tim Davern, general manager of Minnesota Sphagnum, Inc. (MSI), totaled his company's expenditures in Floodwood and the surrounding areas. Yearly figures include $350,000 for salaries and $250,000 for local services such as supplies, parts and miscellaneous items. Another $10,000 is allocated for water sampling and approximately $250,000 covers transportation costs, primarily with loca. Trucking companies.
Start up costs for a peat bog of approximately 300 acres can exceed $2 million, depending on the type of operation. There are approximately 25 peat producers in Minnesota ranging in size from a few acres to about 300 acres. The five largest operations harvest peat on bogs greater than 40 acres.
The peat industry in Minnesota is highly regulated by both the Minnesota Department of Natural Resources and the Minnesota Pollution Control Agency.
"Peat companies are very careful on environmental issues," said Davern. "Contamination of a bog would result in an immediate shutdown until the contamination could be cleaned up. Failure to completely remove any contaminants could cause serious damage to nursery stock and potentially result in legal action against the peat producers."
Bog water levels are gradually lowered to allow vacuum harvesting at approximately two inches per year. Because peat fibers will be damaged under too dry conditions, peat producers are extremely careful not to over drain their bogs.
Peat use has expanded approximately 60 percent over the past 15 years; American producers provided only one-third of the increase in usage. Minnesota peat producers sell everything they produce.
NRRI's efforts have led to new oil sorbent materials, high value added products; greens mixes for sport turfs such as those used for golf courses; and compost.
Peat has long been harvested in Michigan and Canada while Minnesota is a relative newcomer to the industry. The oldest continuous Minnesota company has only been operating for 28 years in the Cromwell area.
"Peat companies are located throughout the state," said peat program director Tom Malterer, "but typically are found in northeastern Minnesota."
Since aspen is the predominant species occupying approximately 40 percent of the state's total commercial forest land, developing management recommendations to increase yields of aspen rank highly.
So far, results indicate that average growth rates of trees treated by thinning were increased by 25 percent compared to trees that were unthinned. NRRI is developing recommendations for thinning based on soil types and stand conditions to assist land managers.
Disease inventories done on sites in the Chippewa National Forest and at Blandin Paper Company indicated that the increased growth rates caused no out break of disease in the trees. The effort also included a one year environmental assessment of birds and small mammals conducted by Center for Water and the Environment and UMD Biology staff.
NRRI foresters Bill Berguson and Dan Buchman have participated with Blandin Foundation in studying the effects of thinning on approximately 3,000 acres of aspen.
"Overall, this study has shown that sites can be managed to increase aspen growth rates with no negative effects," said Berguson. "We now have the knowledge that will allow commercial harvesting of aspen within a shorter time frame and increase wood supplies for the future."
Long considered an inexpensive wood, aspen is perceived as both soft and cheap. But research proves that aspen products are not soft. Aspen is suitable for machining, and it hardens after sawing and drying. It is noted for having both excellent color and grain.
Research on finishing continues and the aesthetic appeal of aspen is improving. Because some areas in the wood remain porous, regular hardwood stains suitable for cherry or oak have, in the past, yielded blotchy results on aspen. NRRI work with Van Technologies of Duluth is solving that problem by development of environmentally-friendly sealers and finishes. The new sealers work extremely well with ultraviolet-cured stains. The most active markets right now for aspen include the do-it-yourself market and exports to Japan.
"Solving technical problems like these mean the opportunity to develop new aspen markets for years to come," said Reynolds.
The company's product line this year consists of wild berry jellies and syrups, hand-harvested lake wild rice, ample syrup, and honey. "Our customers have been very loyal," said Gordon, "and are as excited as we are with the new products we have added each year."
Hand-harvested wild rice comes from both the White Earth and Leech Lake Reservations. In addition, wild berries are provided by both reservations and approximately 30 people from the McGregor - Aitkin area.
During their business start up days, Gordon and Erckenbrack were advised by their local banker to participate in the Center for Economic Development's 1991 Entrepreneurial Development Program. "This program is a great experience for anyone starting a business or thinking about starting one," said Gordon. "It really helped us focus our efforts."
When money for growth was needed, Erckenbrack and Gordon contacted NRRI Business Group's Kathy Forslund. "She's been a tremendous help to us," said Gordon. "We know our product line, but working with Kathy is like having an extra person who knows all the financial information. She's helped us develop our financial outline, cash flow sheets and projections."
"My job is to help Minnesota Specialty Crops obtain the financing they need so they can concentrate on their quality products and on increasing their sales," said business specialist Kathy Forslund. "Readily available operating cash is necessary for all growing companies."
Minnesota Specialty Crops employs four full-time people annually and hires up to 10 people during the busy season from September through December. "The company's growth has been extremely good and the Minnesota Wild(tm) concept has been very well received in the markets it has been introduced into," said Erckenbrack. "The outlook is very bright and the potential is definitely there for growth in both new products and new markets."
Currently, Minnesota Specialty Crops is expanding. After working with Target stores for two years, a new agreement will require additional products for Christmas sales in approximately 160 Target stores across the region.
New products being considered by the company over the next two years include a line of Minnesota Wild(tm) berry wines and also dehydrated and ready-made beverage teas.
Held January 30 at the Duluth Entertainment and Convention Center the "Access to Capital" seminar targeted the needs of northeastern Minnesota entrepreneurs and small businesses looking for start up and expansion capital.
Seminar topics included: starting a business in Minnesota, developing a business plan, buying or selling (valuation) of a business, market research, micro-enterprise loans, Small Business Administration lending, venture capital and early stage financing, commercial lenders, and on-traditional sources of capital in northeastern Minnesota.
"Small business owners and entrepreneurs had access to sessions detailing the information they need to apply for capital and where to get it," said Center for Economic Development associate director Lee Jense
n. "Anyone starting a business or needing to expand a small business found much needed information here." The keynote address was given by U. S. Congressman James Oberstar, who co-sponsored the event with the Duluth Area Chamber of Commerce, the U. S. Small Business Administration and the Center for Economic Development.
Agencies participating in the seminar included Arrowhead Technology Fund, Northland Foundation, community revolving loan funds, private foundations, commercial lenders, Minnesota Project Outreach, utilities, and the Iron Range Resources and Rehabilitation Board.
The workshop provided a great opportunity to partner entrepreneurs with the wealth of resources available to start or expand a business in northeastern Minnesota.
"The Center for Economic Development's business development specialists are available to provide technical assistance to individuals interested in starting or expanding a business throughout the Arrowhead region," said Jensen. "Services range form business planning, market research and loan packaging."
Entrepreneur specialist Dick Braun led the entrepreneurs through the common pitfalls, explaining the development cycle and teaching them how to know if an idea is even ready for the market. The twenty-four potential business owners were not discouraged as they explored the ins and outs of business start up. Sixteen people applied for the more intense, 10 week Entrepreneurial Development Program.
"Drive and determination to succeed in running their own business is one of the key factors. Equally important is the fact that the program helps everyone make an informed decision after researching and developing their ideas," said Braun. "Some may decide that it is not feasible at the present time. The success rate for this aspect of the program is 60 percent."
Future workshops that can increase the chance of success for new businesses are scheduled for the Duluth area this summer and the Ely/Tower area this fall. These workshops will be sponsored by NRRI. If you know of a potential entrepreneur, point them toward the next Entrepreneurial Development workshop.
Presiding over the conference, University of Minnesota senior vice president Jim Infante indicated how appropriate it was for the University to be the host given the over 100 years of linkage between the iron ore industry and the establishment of the Permanent University Fund from mining leases on University land. University of Minnesota President Nils Hasselmo welcomed attendees by saying, "I am happy to see the theme of long-term partnerships represented by this conference." Hasselmo cited the development of the taconite process by Professor Edward W. Davis (1888-1973) as a perfect example of the University's ability to partner with industry and the public to provide long-term solutions to social and economic problems.
"In terms of the industrial value and tax revenue generated by taconite production, we believe it is the most valuable technological process every transferred from a university laboratory to industry," said Hasselmo.
National Importance
Director of the U. S. Bureau of Mines in Minneapolis Lewis Wade emphasized the importance of this industry not only to Minnesota, but the entire nation. In 1994, Minnesota supplied 70 percent of the nation's output of iron ore and taxes exceeded $95 million. With an impact that strong, Minnesota's iron ore industry must keep up with the global competition.
Patrick McCormick of Emerson Electric spoke of "Steel's Changing Customer." As a global manufacturer, McCormick addressed the issue of competitiveness in the marketplace.
Consumers
U. S. Steel's Robert Wargo explained the needs of the integrated steel industry. Needed are higher quality pellets, an increase in use of iron carbide and a decrease in the use of basic oxygen furnaces. All of this information means that the steel industry needs new technology to compete with market driven changes likely to occur in the next few years.
Industry Competition
As the competition of the integrated steel industry, John Correnti of NUCOR explained the minimill outlook. Minimills are now the fourth largest steel manufacturer in the United States. "Minnesota's future is bright, maybe," said Correnti, "but Minnesota must adapt to the changes coming to the industry."
The global competition came next with a Brazilian representative, Diarlhes Pider Benjamin, general coordinator of the National Confederation of Mineral Sector Workers. Benjamin detailed the extent of high quality ore and availability of Brazilian reserves. With 180 million tons of ore per year of 63 percent iron content, Brazil may become Minnesota's chief competitor in supplying ore to users.
"The real enemy to the iron ore industry is alternative or competitive materials used in place of steel," said Andrew Sharkey of the American Iron and Steel Institute (AISI). Sharkey urged that the primary objective of the industry should be to make steel the material of choice for the 21st century instead of alternatives. The fastest growing market for steel is residential construction. To build a new 2,000 square foot home would require two acres of clear-cut timber to build or steel from four recycled automobiles. These numbers make steel an environmentally friendly product with the highest recycling rate of any material in the world.
Labor
President of the United Steelworkers of America, George Becker, addressed the company's needs for price stability by noting new cooperation with industry in offering long-range labor contracts. This solution would assist steel and taconite companies to remain competitive in the global market.
Government
Minnesota Pollution Control Agency commissioner Chuck Williams spoke of the issues of environmental protection. "The MPCA worked hard to establish good relationships allowing companies to focus on technical help and partnerships," said Williams.
New Technology
Joseph Poveromo, director of technology at Quebec Cartier Mining Company, discussed innovations needed in iron and steelmaking. "Pellets are needed to feed electric arc furnaces and blast furnaces if they are to compete with off-shore sources of iron," said Poveromo.
Richard Schultz of Cliffs Reduced Iron Company agreed with Poveromo that Minnesota's iron ore industry must look beyond the current blast furnace customer to the iron customers of the future. He narrowed Minnesota's challenges to three areas: develop a cost effective low-silica flow sheet for taconite pellets and concentrates; find a cost-effective way to eliminate sulfur and gangue coal ash from final DRI products; and become an ironmaker, either by producing pig iron or by developing a cost-effective reduced iron system suitable for a Minnesota location.
Summary Closing comments were made by 8th District Congressman James Oberstar, who stated that Minnesota's ability to meet most of the domestic demand for iron ore and apply research on pelletization of manganese to cut down on imports are crucial to national security and to the balance of trade. "Minerals are the building blocks of our industrial society and Minnesota needs to compete in a global marketplace," said Oberstar. "Research is key to keeping Minnesota's iron ore cost effective."
The Small Business Resource Guide is available free from the Center for Economic Development in conjunction with a grant from the Arrowhead Growth Alliance. The guide provides information on development organizations, financing tools and programs to foster economic growth and job creation as well as financing, direct assistance and consulting and marketing expertise for entrepreneurs and small businesses.
Upcoming business seminars
The Center for Economic Development is sponsoring two courses this summer for small business owners. "Understanding and Using Financial Statements" will be held June 19-22 in Eveleth and Duluth. The Entrepreneurial Development Program will hold a 10 week session starting in May.
New clay deposit discovered
NRRI Minerals was key in the discovery of a new potential kaolin clay resource in the Chippewa Valley.
Equipment donated
The Minnesota Department of Natural Resources donated peat equipment valued at $50,000 to NRRI's peat group for the evaluation of fens and bogs. The equipment, including developmental and prototypes, will be stored at NRRI's Fens Research Facility in Zim.
River contaminants assessed
Minnesota Pollution Control Agency awarded the Center for Water and the Environment a one-year, $231,467 grant for the Mississippi and St. Louis Rivers Sediment Assessment to measure levels of contaminants.
Exotic species studied
Minnesota Sea Grant awarded the Center for Water and the Environment $1,572,877 for a three year study of the impacts of the ruffe, an exotic species, on the Great Lakes.
The Natural Resources Research Institute was established by the Minnesota Legislature in 1983 to foster economic development of Minnesota's natural resources in an environmentally sound manner to promote private sector employment.
Michael Lalich, director
Center for Water and the Environment: Gerald Niemi, director
Center for Applied Research and Technology Development: Thys Johnson, director
Center for Economic Development: Kjell Knudsen, director
NRRI Now
Lisa Hawkinson Wydra, editor
Nora Kubazewski, writer
Ken Moran, photographer
Nancy G. Johnson, photographer