The acquisition is considered a critical milestone in MagIron’s strategy to produce direct reduction (DR) grade pellets and, over time, to establish the first integrated commercial pig iron operation in the United States.
Benefiting from an estimated USD 440 million of prior investment, the Reynolds pellet plant stands out with its modern straight grate design, historical operating track record, and infrastructure that is ready for restart. The facility previously operated with an annual pellet production capacity of approximately 2.2 million tonnes and was designed to allow capacity to increase to up to 3.0 million tonnes with limited additional capital expenditure. Before being placed into care and maintenance in 2016, the Reynolds plant operated in an integrated manner with MagIron’s existing iron ore concentrator in Minnesota.
Following completion of the acquisition, MagIron will own a vertically integrated asset portfolio representing a total investment of approximately USD 660 million. This portfolio includes an iron ore concentrator, a rail load out facility, and a pelletizing plant.
Through this integrated structure, MagIron aims to restart iron oxide pellet production within a relatively short timeframe and advance toward its goal of becoming the first vertically integrated commercial pig iron producer in the United States. In line with this strategy, the company is also evaluating the feasibility of a potential capacity expansion into granular pig iron production in collaboration with Primetals Technologies, a global engineering and plant construction company. If implemented, this step could position MagIron as the only commercial pig iron producer in the United States.
By establishing a fully domestic supply chain, the company aims to reduce the United States’ high dependence on pig iron imports and to use higher quality pig iron with lower impurity levels compared with Brazilian origin imports. Company officials emphasized that a land based commercial pig iron producer would be of critical importance for strategic sectors such as automotive, aerospace, and defense.
Prior to the acquisition, MagIron underwent an extensive due diligence process conducted by third party advisors. This process covered technical, commercial, legal, and environmental reviews, including an analysis of the plant’s pre 2016 production and cost data. The studies validated the capital expenditure, operating cost, production volume, and schedule assumptions underpinning the restart plans.
MagIron CEO Larry Lehtinen stated that the acquisition of the Reynolds pellet plant represents a transformative step for the company, emphasizing that significant progress has been made toward building a reliable supply chain of fully domestic, high quality, and low carbon metallics for the US steel industry.
CoTec CEO Julian Treger emphasized that the acquisition supports MagIron’s strategy to become an integrated DR pellet producer serving the rapidly growing US electric arc furnace steel sector. Treger also noted that pig iron commands higher market prices compared with DR pellets, making commercial pig iron investments strategically attractive.
In its statement, the company added that the takeover and restart of MagIron’s operations will be financed at the MagIron level and that no additional funding from CoTec will be required.
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