The RenewaFUEL plant in K.I. Sawyer is now up for sale.
Cliffs Natural Resources announced Tuesday their RenewaFUEL operations have been indefinitely suspended. They're hoping to sell the plant in the next 45 days.
Construction was just completed at the plant earlier this year. Cliffs says they're now moving their business model in a direction away from RenewaFUEL. They say production problems with the consistency of the biomass design prompted them to sell.
"We weren't able to produce at the design capacity of the plant or at a production level that would really justify keeping the plant open," said Dale Hemmila, spokesman for Cliffs Natural Resources. "RenewaFUEL was successful at the bench level and at the pilot scale, but taking it to the commercial scale, which has never been done before, was more of a challenge. Sometimes that technology just doesn't move very well from the pilot scale to the commercial level."
Constructed to produce high-energy, low-emission biofuel cubes from wood and agriculture feed stocks, RenewaFUEL's production has now ceased.
"There's a number of factors involved in that," Hemmila said. "The bottom line is that we just did not get the level we wanted to be at with RenewaFUEL."
Thirty people are employed at the plant; Cliffs hopes to place those people in other Cliffs jobs in Michigan. They'll also offer severance packages. For now, they'll report to work everyday until sometime in October.
The plant was eligible for government funds through various incentives, such a Renaissance Zone tax break and a $500,000 Community Development Block Grant from the Michigan Economic Development Corporation, but that money will now be returned to Marquette County.
The Marquette Board of Light and Power was the only commercial buyer of the biomass. They say in its initial phases, the product worked well, and they were encouraged by that testing data.
"We wouldn't have to make a really large, significant capital investment to sustain operations on wood to post the permit," said Executive Director Kirby Junttilla. "But there was still a lot of data that had yet to come."
Board of Light and Power needs to supply 10 percent of their energy with renewable resources by 2015; currently they supply only about 3 percent. They're hopeful a sale will take place at RenewaFUEL so they utilize local renewable resources.
Cliffs says the sale of the plant doesn't mean biomass isn't a viable option.
"It's just that we are looking in other directions, in particular, at our core business, which is providing raw materials to the steel-making industry," Hemmila said.
Cliffs is looking for buyers with experience in biomass to take over. If a sale doesn't take place, they may have close down the facility.