The DR-Grade Pellet: Marble-Sized Iron Ore Built for Electric Arc Furnaces
Mesabi Metallics is betting its Minnesota mine on one small product. Here is what a DR-grade pellet is, how it is made, and why electric furnaces want it.
The Minnesota Department of Natural Resources explains the key step in making taconite pellets with a comparison to building a snowman. I love that a state agency chose that image for an industrial process, and it is also accurate. Wet iron powder gets rolled with clay in big turning drums until it forms balls, which are then heated until they are white hot.
Every taconite pellet starts that way. A DR-grade pellet is the pickier cousin, and it is the whole reason Mesabi Metallics' new operation in Nashwauk exists.
From rock to marble
According to the DNR, the rock is crushed to marble-sized pieces, ground to powder with water, and run past magnets that pull out the iron. The waste goes to tailings basins. The iron concentrate is balled and fired. Traditional pellets then ride Great Lakes ore boats toward steel mills in places like Gary and Cleveland.
What makes a pellet DR-grade
Purity. DR-grade pellets carry an iron content of 67 percent or higher, according to Twin Cities Business, and they can be turned into direct reduced iron with 90 percent iron or more. The raw rock, remember, is at best 32.5 percent iron, per MNopedia. Doubling that takes a lot of grinding.
Two pellets, two destinations
- Blast furnace pellet
- Fed into a blast furnace that melts ore into molten pig iron
- DR-grade pellet
- Higher iron, lower impurities; reduced to solid iron without melting
- Direct reduced iron
- About 90 percent iron or more; a feed for electric arc furnaces
- Other Minnesota DR producers
- U.S. Steel's Keetac and Cleveland-Cliffs' Northshore in Silver Bay
Why Minnesota was slow to make them
For most of the taconite era, nobody on the Range needed to. The customers were blast furnaces, and blast furnace pellets were the product. Twin Cities Business notes that U.S. Steel reconfigured one line at its Keetac plant in Keewatin for the purer grade, and that Cleveland-Cliffs' Northshore operation in Silver Bay began making DR-grade pellets in 2019. Silver Bay is a fitting place for it. The town was carved out of the Lake Superior shore in the early 1950s around Reserve Mining's plant, and the city's own history records that its first pellet shipment went out aboard the ore boat C. L. Austin in April 1956. The plant was named the E. W. Davis Works, after the professor who figured out taconite. Being an early adopter twice in about 60 years is a nice line on any town's resume.
Why electric furnaces care
An electric arc furnace makes steel by melting "scrap steel, direct reduced iron, and/or pig iron," in the words of the American Iron and Steel Institute. Scrap is the staple. Midrex, which designs direct reduction plants, defines direct reduced iron as iron made by stripping the chemically bound oxygen out of pellets without melting them, and notes it is low in copper, nitrogen and other unwanted "tramp" elements. It also argues there simply is not enough scrap to meet global steel demand. So clean ore-based iron fills the gap.
Twin Cities Business makes the most useful point. Most of the Range's traditional pellets cannot go into these mini-mills at all. That has left Minnesota's miners tied mostly to blast furnaces, while the growing side of American steel has often bought its ore-based iron, such as pig iron, from overseas. Mesabi's plan, per MPR News, is up to 7 million tons a year of DR pellets from the Nashwauk pit.
Where this pellet is supposed to go
That is still unsettled. Iron Range Today reported the company already held permits for a direct reduced iron plant and electric furnace on the Range. On September 28, 2026, its name went on a planned $15 billion Iowa steel mill, which our main explainer covers. We could not confirm from published plans exactly how Iowa will use these pellets, so I would not trust any account that says it knows.
What I can say with confidence is smaller and nicer: a rock the Range once treated as waste, rolled like snow and fired white hot, is now the product a whole new operation is built around.
Sources
Every factual claim above traces to one of these. Links open in a new tab.
