(1) A taxpayer may claim a credit against the tax imposed by this act equal to $1.00 per long ton of qualified low-grade hematite consumed in an industrial or manufacturing process that is the business activity of the taxpayer.

    (2) If the credit allowed under this section for the tax year and any unused carryforward of the credit allowed under this section exceed the tax liability of the taxpayer for the tax year, the excess shall not be refunded, but may be carried forward as an offset to the tax liability in subsequent tax years for 5 tax years or until the excess credit is used up, whichever occurs first.

    (3) The credit under this section shall be based on low-grade hematite consumed on and after January 1, 2000.

    (4) As used in this section:

    (a) “Consumed in an industrial or manufacturing process” means a process in which low-grade hematite is used as a raw material in the production of pig iron or steel.

    (b) “Low-grade hematite” means any hematitic iron formation that is not of sufficient quality in its original mineral state to be mined and shipped for the production of pig iron or steel without first being drilled, blasted, crushed, and ground very fine to liberate the iron minerals and for which additional beneficiation and agglomeration are required to produce a product of sufficient quality to be used in the production of pig iron or steel.

    (c) “Qualified low-grade hematite” means pellets produced from low-grade hematitic iron ore mined in the United States.