Mesabi Nugget 'Good to go' - Steel Dynamics, Inc.

A publication for employees and friends of
Mesabi Nugget
‘Good to go’
Minnesota plant to supply
high-purity iron to SDI’s
Indiana steel mills.
ISSUE 22 inside: Third-quarter update Healthy choices Bennett’s need for speed

COVER
Starting up
Mesabi Nugget will be the first
plant in the world to produce
iron commercially using the
revolutionary ITmk3® process.
Be it a warm summer morning or a frigid, windy winter
afternoon, over the past two years construction of the Mesabi
Nugget project progressed at a brisk pace. Site preparation at
Hoyt Lakes, on the Mesabi Iron Range in the wilds of northeastern
Minnesota, began in the fall of 2007. Through two winters and two
summers construction and equipment installation proceeded to bring
the new operation to its current start-up phase in December 2009.
At one point this past summer, more than a thousand construction
workers were on site, tasked in a variety of activities. This was not
a simple, run-of-the-mill construction project. The facility includes
more than a dozen interconnected structures, some huge and some
small, tied together with now unseen underground utilities. The
project also includes myriad materials handling machines conveying
resources from area to area. Together these components comprise
a well-coordinated complex designed to produce iron nuggets
continuously at a rate of 500,000 tonnes or more per year.
Mark Millett, who heads up SDI’s ferrous resources initiatives
as well as metals recycling, says, “We are very excited about the
opportunity presented by Mesabi Nugget. Uniquely, SDI is
developing a captive domestic supply of high-quality pig iron. We
are optimistic that in the coming years this Iron
Iron provided by
Range project will come to differentiate SDI
among U.S steelmakers and help to underpin Mesabi Nugget
SDI’s continued growth in steelmaking. Like will help to
our investment in OmniSource that gives our underpin SDI’s
steel mills better access to scrap metal, SDI’s
continued growth
strategic commitment to ironmaking will help
to assure our steel mills’ long term success. in steelmaking.
“Our Mesabi team and contractors have done an outstanding job of
keeping this project on track, despite extreme weather conditions and
working in a remote, isolated area. We also salute the numerous
engineers and operating personnel from Iron Dynamics and Steel
Dynamics who have contributed their knowledge and expertise.
“We are very happy to have the support of our new neighbors
on the Iron Range and the backing of the State of Minnesota.
The Mesabi Nugget plant will run with crews and staff of about
75 people. Many of these hail from upstate Minnesota,” Millett said.
COVER
A breakthrough technology
Steel Dynamics made its initial commitment to the ITmk3 ®
technology that is employed at the new Mesabi Nugget plant in
First helpers Jeff Erickson and
James Cone, with supervisor
Steve Burgess, oversee the mixing,
balling, and drying operations.
MESABI NUGGET PRODUCTION FLOW
Caption
PULVERIZED
COAL
FLUX AND BINDER
Iron ore
concentrate
DRY BALLS
NUGGETS
SLAG
A large balling drum tumbles a moist mixture of three materials (at far left) to form balls
that are about 3/4 of an inch in diameter. The balls are then dried in the oven shown at
left, after which they go to the rotary-hearth furnace.
ITmk3® is a registered trademark of Kobe Steel, Ltd.
2 STEEL DYNAMICS DYNAMIC DETAILS 3

COVER
2001. Along with several other partners, SDI invested in a pilot
demonstration plant, also in Minnesota, that successfully produced
the first Mesabi iron nuggets in 2004. Having proved the viability
of the process by producing nearly 10,000 metric tons of nuggets in
231 days of operation, the pilot plant was shut down to prepare for
a larger, commercial facility. The nearly pure iron nuggets from the
pilot plant were tested in the melt shop at SDI’s
This new process Butler Flat Roll mill, where they were found to
is both more have ideal characteristics for mini-mill
energy efficient steelmaking.
To produce some types of steel products—
and more
flat rolled steel, railroad rail, and certain
environmentally high-end alloyed special-bar-quality (SBQ)
friendly than steels—iron is needed in mini-mill steelmaking
blast furnace to supplement scrap steel. Most mini mills
meet their need for iron by relying on pig iron
technology.
ingots imported from South America or other
parts of the world. Virtually since its founding, Steel Dynamics has
sought to develop an internal supply of iron units to reduce its
dependence on foreign sources. Iron Dynamics, which started up in
1998, serves this need (see page 12), but the ITmk3 ® process
promises to produce iron at lower cost and in higher volumes.
The ITmk3 ® process was developed by Kobe Steel, Ltd., of Japan.
Kobe and its subsidiaries contributed much of the design and
technology employed in the new plant. The Mesabi Nugget plant is
officially designated as an LSDP—Large-scale Demonstration Plant,
because it is the first ITmk3 ® plant capable of high-volume
production of iron nuggets.
SDI owns 81 percent of Mesabi Nugget and Kobe Steel, 19
percent. The companies shared in the investment in the facility and
will share in the profits. Most of the Mesabi nuggets produced by the
plant will be sold to Steel Dynamics and will be shipped by rail to
SDI’s three Indiana mini mills, primarily to Butler.
Steve Rutherford, Mesabi Nugget engineering manager, says,
“The ITmk3 ® process is truly a game-changing process—the third
generation in ironmaking technology. It goes beyond blast furnaces
and beyond natural-gas-based processes, offering simplicity and
lower costs than older processes—both capital and ongoing
operating costs. Mesabi Nugget promises to be both environmentally
Conveyor and concentrator building
Clarifier
Filtering
Iron ore concentrate
Iron processing
Clarifier
Slurry
lines
Iron ore
concentrate
Filtering
Reductant
(coal)
Coal
Crushing
and drying
Conveyor stacking coal
Slurry lines
Mixing Balling Drying
Mixing
ITmk3® Process Flow
Balling
Rotary Hearth Furnace (RHF)
Heat recovery
(photo from pilot plant 2004)
Air
Rotary Hearth Furnace
Heat
recovery
Flue Gas
Offgas treatment
COVER
For a more detailed discussion
of iron-making at Mesabi Nugget,
please see the Steel Dynamics Web site:
www.steeldynamics.com/mesabi/overview.pdf.
Cooling
Separation
Separation
In December 2007, the first concrete foundations were poured for the 180-foot-diameter
rotary-hearth furnace. Two years later, the completed furnace is enclosed in a large
building, ready to begin operation.
Conveyors to output nuggets and slag
4 STEEL DYNAMICS DYNAMIC DETAILS 5
Slag
Iron Nuggets
ITmk3® is a registered trademark of Kobe Steel, Ltd.

COVER
friendly and more energy efficient,
reducing emissions by more than
40 percent compared to current
processes and using 30 percent less
energy than integrated steelmaking.”
What comes next
While expectations for the new
Mesabi Nugget plant are high as
commissioning begins, it will likely
take a year or more to fully examine
how well the technology works,
resolve any technical or operational
issues, and examine financial
performance. If the process works well
and volume ramps up as expected
toward the plant’s design capacity,
further investment is possible. In
constructing the infrastructure to
support the first plant, plans were
made to add two, and possibly three,
additional modules at the site, each
having a similar production capacity to
the first. Of course, the financial
performance of the project will be a
major part of the decision-making
process regarding expansion.
SDI’s board of directors and executive officers got a firsthand look at the new facility, visiting the
plant during their board meeting in August. They were impressed by the scope of the project and
the scale of the facilities.
The Mesabi Nugget plant was
located on the Iron Range because of
the proximity to iron ore there. SDI
expects, in time, to be able to utilize
iron ore concentrate that is provided by
an SDI-owned iron ore mine on the site.
Originally, the approval of the
environmental permits that would allow
mining activity to resume was expected
by the end of 2009. Now, it is believed
that a permit will not be issued until the
fall of 2010, in which case, mining could
not start until the end of 2011. Steel
Dynamics owns about 6,000 iron-rich
acres holding reserves that would meet
nugget-plant iron needs for 50 years or
more, plus SDI holds options to buy, or
has mineral rights on, an additional
9,000 acres.
In the meantime, the team in
Minnesota will be busy ramping
up production of iron nuggets at
the world’s first ITmk3 ® plant, and
fine-tuning the plant to achieve
maximum production over the
next couple of years. n
97˚
96˚
Minnesota Mining: The Iron Range of northeastern
Minnesota (see map) produces 75 percent of the iron ore mined
95˚
94˚
93˚
92˚
91˚
90˚
in the United States (40 million tons annually). In the future,
SDI plans to mine taconite from the area surrounding the plant
(aerial photo) and concentrate it for use in the nugget plant.
For now, iron ore concentrate is purchased and loaded onto
a conveyor leading to the concentrator building.
49˚
C ANADA
48˚
MESABI IRON RANGE
MESABI NUGGET
Hoyt Lakes
Lake Superior
47˚
MINNESOTA
WISCONSIN
46˚
Minneapolis
Saint Paul
45˚
44˚
Sioux Falls
97˚
96˚
95˚
94˚
93˚
92˚
91˚
90˚
Mesabi Nugget aerial photos courtesy of Aero-environmental Consulting.
6 STEEL DYNAMICS

Corporate Office
7575 West Jefferson Boulevard
Fort Wayne, Indiana 46804
www.steeldynamics.com
ON THE COVER
Electricians Ed
Lach and Nathan
Lay discuss the
start-up of the
Mesabi rotary
hearth furnace
with Plant Manager
Jeff Hansen.
Dynamic Details is published for the employees
and friends of Steel Dynamics.
Fred Warner, editor.
Articles may be reproduced with permission.
For information, contact Fred Warner, investor
relations manager, at (260) 969-3564 or by
e-mail at f.warner@steeldynamics.com.
Issue 22, December 2009
This publication contains predictive statements about
future events. These statements are intended to be
made as “forward-looking” within the safe-harbor
protections of the Private Securities Litigation Reform
Act of 1995. Reference is made to SDI’s detailed explanation
of the many factors and risks that may cause
such predictive statements to turn out differently, as
set forth in SDI’s most recent Annual Report on Form
10-K and other reports from time to time filed with the
Securities and Exchange Commission, available publicly
on the SEC’s Web site.
© 2009 Steel Dynamics, Inc.
MESABI NUGGET
1
2
3
4
8
5
6
7
1 Concentrator
2 Slurry lines
3 Filtering
4 Mixing, balling,
and drying
5 Rotary hearth furnace
6 Water treatment
7 Waste water treatment
8 Mercury filter
9 Rail car dumper
Mesabi Nugget aerial photos courtesy of Aero-environmental Consulting.
The dawn of a new age of iron
Construction at the Mesabi Nugget facility is nearly complete,
with production beginning this month. The aerial photo above,
taken in late November, identifies the buildings on the site. In the
picture at left, steam rises as the heat-up of the Mesabi Nugget
rotary-hearth furnace begins. See related story on page 2.