ALSOINSIDE

Cliffs equip-ment purchasesSpent $60M in new equipment

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Eagle MineExcavation under way atEagle Mine

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Cliffs NaturalResources Set record revenues in2011

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Empire Mine getsnew trucksLarger vehicles are an investment in efficiency

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Kennecott Mar-quette educationcenterHelping to educate thepublic about company’slocal operations

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County Road595Still in the works

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2012MINERAL EXTRACTION — SECTION J

MONdAy, MARCH 26

PROGRESSA SPECIAL SECTION OF THE MINING JOURNAL

By JOHN PEPINJournal Staff Writer

HUMBOLDT — Efforts to refurbish theHumboldt Mill as an ore processing centerare moving forward successfully accordingto officials with the Kennecott Eagle Miner-als Co., which owns the facility.

Kennecott purchased the Humboldt Millin 2008 with plans to crush and grind ore atthe facility from the company’s nickel andcopper Eagle Mine, which is situated about25 miles to the north in Michigamme Town-ship. Blasting at the mine to excavate theportal began last fall.

Production from the $469 million miningproject is scheduled to begin next year,with a yield of 300 million pounds of nickeland 250 million pounds of copper expect-ed over the roughly seven- to eight-year lifeof the mine.

At the mill, Kennecott began a nearly$100 million investment in site cleanup, en-vironmental reclamation and equipmentupgrades. Kennecott said that investmentwill ensure safe and efficient operation ofthe mill.

The Cleveland Cliffs Iron Company

owned and operated the Humboldt Millfrom the 1950s into the 1970s. During thattime, CCI processed 10,000 tons of ore perday through the mill. In the mid-to-late1980s, the Callahan Mining Company usedthe site for Ropes Gold Mine processing.Mineral Processing Corporation owned theproperty most recently before it was sold toKennecott. The mill had sat idle since themid-1990s.

Kennecott expects to run the Humboldtmill more cost-effectively and better envi-ronmentally than previous owners.

Kennecott use of the site would be about20 percent of the 10,000 tons per day ca-pacity of the mill.

Rising fuel costs have helped make thelocal milling prospect look attractive to Ken-necott.

“By utilizing Humboldt, Kennecott is ableto extract more nickel and copper at lowergrades. This leads to a better use of themineral resource, more jobs, more taxes,and a longer mine life,” Kennecott officialssaid in the overview.

Kennecott is investing nearly $100 millionin the Humboldt Mill project, which is ex-

pected to employ about 75 to 100 workersduring construction and more than 65 full-time employees once the mill is operating.The mill would be the largest employer inHumboldt Township.

Kennecott expects construction and ren-ovations to take place this year and intonext year at the mill. Mill equipment is cur-rently being evaluated for refurbishment ordisposal.

Once mine production starts, Kennecottplans to truck ore from the Eagle Mine tothe Humboldt Mill, where it would be milledand separated to form a concentrate,which would then be shipped by rail to On-tario for further processing. Residual wasterock would be placed in the abandonedHumboldt Mine pit.

In addition to the Eagle Mine processing,Kennecott officials have said the HumboldtMill could add capacity in the future to han-dle additional mining projects in the regionfrom Kennecott or other interests.

John Pepin can be reached at 906-228-2500, ext. 206. His email address isjpepin@miningjournal.net.

Humboldt MillMajor refurbishing project successfully launched

Progress 2012 SECTION J_Progress 2010 SECTION A 6/29/12 8:22 AM Page 1

By JOHANNA BOYLE Journal Staff Writer

PALMER — Cliffs Nat-ural Resources an-nounced its projectionsfor capital investmentsfor 2012, including $60million to be spent at theEmpire Mine, one of twomines the company op-erates in Michigan.

The Empire invest-ment, which will go to-ward the purchase ofmining equipment, will al-low the mine to operateat an annualized rate of 3million tons, dependingon market conditions,said Dale Hemmila, di-rector of Public Affairs forCliffs in North America.

"We have capacitygreater than that, but itdepends on the market

conditions," Hemmilasaid. "We've earmarkedthe capital that takes usthrough 2015."

As far as extending thelife of the mine beyond2015, Hemmila said thecompany is currentlylooking at other options.

The company an-nounced a $1 billion in-vestment Cliffs plans tomake in operationsthroughout 2012, includ-ing $300 million of sus-taining capital and $700million of growth and pro-ductivity-improvementcapital.

The 2012 capital bud-get is a 12 percent in-crease over the 2011capital expenditures,which totaled approxi-mately $880 million.

In addition to the in-vestment at the EmpireMine, Cliffs plans to in-vest in its Eastern Cana-dian Iron Ore operations,Asia Pacific Iron ore,North American Coal andin its chromite project innorthern Ontario.

2J -— The Mining Journal Monday, March 26 PROGRESS2012

Cliffs to spend $60M in 2012on equipment purchases

We have capacitygreater than that, but it de-pends on the market con-ditions. We've earmarkedthe capital that takes usthrough 2015."

“

- DALE HEMMILADirector of Public Affairs

for Cliffs in North America

”

An aerial view of the Empire Mine pit and facility. (Cliffs Michigan Mining Co. photo)

Progress 2012 SECTION J_Progress 2010 SECTION A 6/29/12 8:22 AM Page 2

By JOHN PEPINJournal Staff Writer

MARQUETTE — Work-ers at the Kennecott EagleMinerals Co. nickel andcopper mine on the YellowDog Plains recently beganinitial blasting to excavatethe mile-long tunnel to theore body, with the work ex-pected to take about ayear to complete.

The company first begandrilling into bedrock, justeast of the tree coveredEagle Rock outcropping,on Sept. 18, four days af-ter Ingham County CircuitCourt Judge Paula J.M.Manderfield refused togrant a stay, which wouldhave blocked Kennecottfrom beginning that exca-vation work.

“We are now into adrilling, blasting, excavat-ing and setting supportstructure cycle,” said Ken-necott Spokeswoman DebMuchmore. “We have justbegun that process. Thefirst full cycle was on the22nd. That was the firstday charges were set.”

During the summermonths, a roadway rampleading to the portal wasbuilt and a steel tunnelcovering for the road at themine entrance was erect-ed.

Dirt was backfilled overthe tunnel at the portalend, adjacent to thebedrock. The tunnel willeventually be painted.

The sloped roadwayleading into the mine,which is on a 13 percentgrade, will eventually allowfor transport of workers in-to the ground, while alsoserving as the route for re-moval of ore from themine.

Kennecott officials saidthe excavation is beingconducted without impact-ing Eagle Rock.

Most of the key surfacefacilities structures for themine, situated on 120-acres of state land inMichigamme Township

west of Big Bay, are large-ly completed. Some ofthose components includethe water storage area, atemporary rock storagepad, truck washing facili-ties, administrative officesand the water treatmentfacility, which has beencompleted and is in theprocess of being commis-sioned.

The roughly 200 contrac-

tors working at the mineare currently on schedulefor construction by the endof 2012, with production atthe mine slated for the fol-lowing year.

The portal and tunnelconstruction recently be-gun, which will continuethrough the winter, is thenext focus of the contrac-tors.

When completed, the

mine is expected to pro-duce 300 million pounds ofnickel and 250 millionpounds of copper. Thecapital investment of theEagle Project is expectedto exceed $469 million.

John Pepin can bereached at 906-228-2500,ext. 206. His email ad-dress is jpepin@min-ingjournal.net.

The Mining Journal, Monday, March 26 — 3JPROGRESS2012

Excavation at the KennecottEagle Mine now underway

An aeriel view of the Kennecott Eagle Minerals Co. nickel and copper mine on theYellow Dog Plains in Michigamme Township. (Kennecott Eagle Minerals Co. photo)

Progress 2012 SECTION J_Progress 2010 SECTION A 6/29/12 8:22 AM Page 3

4J — The Mining Journal, Monday, March 26 PROGRESS2012

Progress 2012 SECTION J_Progress 2010 SECTION A 6/29/12 8:22 AM Page 4

The Mining Journal, Monday, March 26 — 5JPROGRESS2012

Progress 2012 SECTION J_Progress 2010 SECTION A 6/29/12 8:22 AM Page 5

By KYLE WHITNEY Journal Staff Writer

PALMER — Cliffs Nat-ural Resources put touse a new fleet of vehi-cles into operation at theEmpire Mine last spring.

The truck, a Komatsu930E-4SE, towers justover 24 feet above theground and has a ratedpayload capacity of 320tons.

The new truck, whichhas a 1,400-gallondiesel fuel tank, is a stepup from the other 240-ton trucks in operation.

Niine more of the new$5 million trucks went in-to service at the Empireand Tilden mines in Julyand a total of 20 will berolled out in the next fewyears.

In addition to updatingthe fleet of trucks, thenew vehicles will also in-crease mine safety andshrink Cliffs’ carbonfootprint, according tosenior area manager ofMichigan mining opera-tions Jeffrey Johnson.

“We’ll have fewer vehi-cles in the pit, fewer in-teractions and a safetyimprovement as a resultof that,” he said.

Johnson said that dur-ing the next few years,the hauling fleet willtravel 1.6 million fewermiles, cutting out 5 mil-lion gallons of fuel.

“They’ll burn a fewmore gallons per hour,but they are carryingmore material, so theactual gallons per ton isreduced. It’s a little more

efficient just because ofthe scale,” he said.

The new trucks will in-crease operational effi-ciency, but Johnson saidthey illustrate a deepcommitment, as well.

“We see Cliffs provid-ing us with this capitalas a vote of confidencefor Michigan,” he said.“There will be $100 mil-lion worth of capital, justin hauling trucks alone.”

The trucks arrive inlarge pieces and are ful-ly assembled on-site, aprocess that takes threeto four weeks.

Kyle Whitney can bereached at 906-228-2500, ext. 250. Hisemail address is kwhit-ney@miningjournal.net.

6J — The Mining Journal, Monday, March 26 PROGRESS2012

New, larger vehicles an investmentin Empire Mine efficiency

They’ll burn afew more gallonsper hour, but theyare carryingmore material, sothe actual gallonsper ton is re-duced. It’s a littlemore efficient justbecause of thescale.

“

- JEFFREY JOHNSON

Manager of Michigan mining operations

”

The newest vehicle in Cliffs’ fleet, the Komatsu 930E-4SE, is now in operation. The hauling truck, which car-ries a price tag of about $5 million, was the first of 20Cliffs will purchase over the next five years. (Journalphotos by Kyle Whitney)

Progress 2012 SECTION J_Progress 2010 SECTION A 6/29/12 8:22 AM Page 6

By JOHN PEPINJournal Staff Writer

MARQUETTE — TheKennecott Eagle Miner-als Co. recently openedan education center inMarquette, aimed athelping the public learnmore about the compa-ny’s local operations.

“We want to be moreaccessible to our com-munity,” said ChantaeLessard, Kennecott prin-cipal advisor, communi-ties and social perfor-mance. “Our learningcenter in downtown Mar-quette will enhance ourvisibility and provide con-venient accessibility inthe heart of the greaterMarquette area.”

Construction began inJune on the 1,950square-foot facility, whichis located at 153A W.Washington Street, nextto Richardson Jewelers.

The center includesthree WiFi workstations,kitchen facilities, sharedrestroom facilities and aconference meetingroom able to accommo-date a dozen people.

Lessard said the confer-ence room and otheramenities will be used byKennecott, but also bythe public.

“We want this to be awarm environment wherepeople can access usand get informationabout our (Eagle Mine)project,” Lessard said.“We envision a place thatis warm and welcoming,and a place where ourneighbors and fellowcommunity members willwant to gather.”

The education centerwill have a full-time man-ager and Kennecott staffwill also rotate weeks atthe center, fielding ques-tions and hearing com-ments.

“The central theme ofour learning center willbe models and other re-sources that enable visi-tors to understand ourcommitment and com-prehensive approach toenvironmental steward-ship,” Lessard said. “Ofparticular interest and im-portance to people is ourapproach and design to

managing water to en-sure water resourcequality and protections.”

Some of the modelsand exhibits at the centerwill include: ore and con-centrate; ore body coresamples; historical infor-mation about mining inthe Upper Peninsula; anore body cut away modelwith equipment; nickeland its uses; Rio Tintoworldwide operationsand resource sourcing;how Kennecott manageswater resources andquality including a watertreatment plant modeland Rio Tinto’s relation-ship globally with tradi-tional land owners. Therewill also be an interactivevideo display.

Including leasing, con-struction, developmentand operation, the edu-cation center will be a$260,000 investment forKennecott.

John Pepin can bereached at 906-228-2500, ext. 206. His emailaddress is jpepin@min-ingjournal.net.

By JOHN PEPINJournal Staff Writer

MARQUETTE — Morethan 300 people packed apublic hearing in Ishpem-ing recently to offer inputinto the Michigan Depart-ment of EnvironmentalQuality’s decision onwhether to grant the Mar-quette County Road Com-mission permits neces-sary to build County Road595.

The project requireswetland, inland lake andstream and floodplain per-mits. The DEQ is requiredby law to make a decisionon permit issuance byJune 15. An extension toJuly 9 is allowable if theroad commission and theDEQ mutually agree.

A total of 63 people tes-tified at the hearing Tues-day. Prior to testimony,Steve Casey of theDEQ’s Water ResourcesDivision at Sawyer saidcomments consideredshould address statutorycriteria the agency willuse to make its decision.Voiced support or oppo-sition for the project wasirrelevant to that deci-

sion, Casey said.The 21-mile north-south

road would connect U.S.41 with Marquette CountyRoad AAA, near the Ken-necott Eagle MineralCompany’s nickel andcopper mine on the YellowDog Plains. Kennecottwould use the road to haulore to its Humboldt Millprocessing center, withthe county eyeing otherbenefits to building theroad.

The road commissionsaid the primary roadway“will improve emergency,commercial, industrial andrecreational access tonorthwest MarquetteCounty and reduce trucktravel through MarquetteCounty’s population cen-ters.”

Road commission offi-cials intend to mitigate thewetlands impacts as re-quired at five sites locatedin three of the four water-sheds involved in the pro-ject. Some streamrestoration work is alsoplanned, including a $1.6million project on the eastbranch of the SalmonTrout River, which would

be expected to increasethe benefits to the ecosys-tems involved. There are23 stream crossings, 17 ofwhich would be improvedfrom current condition, theremaining six are new.

The application’s sum-mary concludes the Coun-ty Road 595 project, “isbeneficial for the generalpublic, businesses, the lo-cal and regional economyand local governmentalagencies and is essentialfor public safety.

“The public trust in theresources that would beimpacted by the projecthas been protected to theextent feasible and mea-sures will be taken to miti-gate unavoidable impacts.The proposed CountyRoad 595 will improvepublic access to thou-sands of acres of landopen to public use for hik-ing, fishing, canoeing orkayaking, hunting andgathering.”

John Pepin can bereached at 906-228-2500,ext. 206. His email ad-dress is jpepin@min-ingjournal.net.

Kennecott Marquetteeducation centerteaching the public

County Road 595still in the works

PROGRESS2012 The Mining Journal, Monday, March 26 — 7J

Above, the exterior of the new Kennecott Eagle Minerals education center in Mar-quette. The center focuses on helping the public learn more about company opera-tions. (Journal file photo)

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8J — The Mining Journal, Monday, March 26 PROGRESS2012

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