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KEEWATIN, Minn. (AP) — Construction has started on one of the largest taconite projects in Minnesota in recent years.

U.S. Steel dedicated its $150 million plant addition in Keewatin Wednesday as steelworkers picketed on the road to the facility.

The union that represents workers at the Keetac plant is supportive of the project, but remains at odds with U.S. Steel over a new contract.

The national contract between the union and U.S. Steel expired Sept. 1. United Steelworkers have already settled with Cleveland-Cliffs, U.S. Steel’s main competitor on the Iron Range.

The new U.S. Steel addition in Keewatin will produce pellets with a higher iron content than the traditional pellet. Full production of the new pellet is expected in 2024, the Star Tribune reported.

Keetac is being retooled to make “direct-reduced” grade taconite pellets, which are used for producing iron for electric arc furnaces.

Electric arc mills have traditionally used scrap metal but are increasingly utilizing direct-reduced iron or pig iron made from direct-reduced taconite pellets.

Taconite plants on the Iron Range, including U.S. Steel’s Minntac facility in Mountain Iron, mainly produce iron ore pellets that are used in traditional blast furnaces. Electric arc furnaces are the primary source of U.S. steel production, and its share of the market is only predicted to grow.

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