Renewafuel biomass cube production plant could shut down

By Lisa Gibson | September 27, 2011

After just a few months of production, Cliffs Natural Resources Inc.’s biomass cube production facility in Michigan could close its doors, a result of the plant’s performance not reaching design capacity and expected production levels.

Cliffs’ board of directors is contemplating idling and selling the plant, with an expected financial impact of about $30 million, according to the company. The plant, operated by Cliffs’ subsidiary Renewafuel LLC, is in the Telkite Technology Park near Sawyer International Airport in Marquette, Mich., and just began production in the first half of this year. The plant delivered its first commercial supply of biofuel cubes, made from locally sourced wood and agricultural feedstocks, to the Marquette Board of Light and Power in July, according to Cliffs.

“Over recent years, Cliffs executed a strategy focused on expanding its portfolio of steelmaking raw material assets,” said David Blake, senior vice president of Cliffs. “Cliffs continues to successfully grow its core iron mining business with a number of expansion projects underway. With this, it is essential that our management focus on allocation of capital resources be deployed where we can have the most impact for all stakeholders.”

The plant employs 30 workers and Cliffs hopes to reassign them where possible to other positions within the company.

“While we believe the Renewafuel business model remains viable, the business is likely to have better prospects with a company more experienced in the area of biofuels that can develop Renewafuel to its full potential,” Blake said.