Renewafuel, a subsidiary of Cleveland-Cliffs, has announced that it will build a next-generation biomass fuel production facility at the Telkite Technology Park in Marquette, Michigan.

Projected to begin operations in the first quarter of 2009, the plant will annually produce 150,000 tons of high-energy, low-emission biofuel cubes from a sustainable composite of collected wood and agricultural feedstocks, including wood byproducts, corn stalks, grasses and energy crops.

Renewafuel’s biofuel cubes are expected to generate about the same amount of energy as coal from the western US, while emitting 90% less sulfur dioxide, 35% less particulate matter and 30% less acid gases than coal.

The cubes are made from feedstocks that are considered biogenic carbon, and will not add to atmospheric concentrations of CO2. Because of their size and density, the cubes can reportedly be used in most solid fuel systems with little or no modifications required.

At full production, Renewafuel is expecting to produce approximately 60,000 tons of biomass fuel cubes for the steam plant of Marquette Board of Light and Power, as well as replace a portion of coal used at Cliffs’s two nearby Michigan iron ore mines as process fuel for kilns used to harden iron ore pellets. Cliffs has indicated the capital cost for the facility would be approximately $10 million.