A steam mill system for transport of powdered activated carbon (PAC) from a storage silo to a steam powered jet mill to produce milled sorbent for use in a coal-fired power plant flue gas for mercury control. More specifically, the present disclosure relates to a cyclone separator arranged in a PAC transport line prior to a steam powered jet mill for separation of PAC according to particle size for the purpose of achieving reductions in associated compressed air usage, operating costs and capital costs.