Magnetation, Inc. has successfully started up its Rev3 Separator, a high-volume hematite concentrator. The unit began operating April 21 and will replace existing technology at the Magnetation Plant 1, the company said in a press release.

The firm is a scram mining operator and producer of recycled iron oxide concentrate made from “legacy iron” set aside from prior mining and processing operations. Magnetation, Inc. is marketing the Rev3 Separator to iron miners globally for the use in upgrading low grade hematite ores to commercial grade of 65 percent iron and higher.

The success at Plant 1 has led to a long-term iron ore concentrate off-take agreement between Magnetation, Inc. and a large North American steel producer. Magnetation LLC, a subsidiary of Magnetation, Inc., will construct and operate a second plant largely dedicated to this new customer and off take agreement. Its design will be based on the new Rev3 Separator technology, having a capacity of 650,000 metric tons per year of iron ore concentrate with upside potential to produce up to 800,000 metric tons of iron ore concentrate per year. The feedstock for Plant 2 will be natural ore tailings averaging 30-40 percent iron content.

Magnetation LLC is currently raising $70 million for the construction of Plant 2, which is expected to begin by October at a site southeast of Taconite, Minn., at the Holman Tailings Basin. Engineering, financing and permitting are underway and construction is expected to take 10-12 months to complete with start-up targeted for the third quarter of 2011. The new plant will be three times larger than Magnetation’s Plant 1 near Keewatin and provide 50 permanent jobs and 200,000 man-hours of construction work.

The privately held Minnesota corporation plans to manufacture, sell and license its proprietary and patent-pending equipment, software and systems to iron ore miners globally to extract hematite iron concentrate from lean iron ore materials stockpiled at various mining districts worldwide. Based on existing sales commitments, Magnetation expects to grow consolidated revenue of it and its subsidiaries at an average year over year rate of 280 percent from 2009 through 2012.

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