The completion of these two new terminals marks the culmination of a major modernization and cost reduction program undertaken by Armco and Republic Steel Corporation. The two companies jointly own the Reserve Mining Co. at Silver Bay, Minnesota which has been producing taconite pellets since 1955.
The recent half-billion dollar project encompasses two major tasks:
Upgrading of the pellet plant at Babitt and Silver Bay, Minnesota which includes the construction of a new massive tailing system.
Radical alteration of the pellet transportation system.
The producing plants of these two steel companies are located inland from the Lakes. Over decades, only small sized ships could be used to negotiate the meandering river system to the plants. In the case of rail-based plants, ore or pellets were unloaded from the ships onto railcars by massive Huletts which are costly to operate and maintain.
To materially reduce pellet delivery cost, the antiquated ships had to be replaced by modern cost-effective 1,000 ft self-unloading vessels the largest passable through the new lock at Sault Ste. Marie opened in 1970. New transshipment terminals had to be built to transship from the giant carriers to river vessels or onto railcars. These facilities must also serve as a "warehouse" for winter storage when the Lakes are frozen and the plant continues to consume raw materials for steelmaking.