Sep 23 2008
Essar Steel Holdings Ltd, a part of Essar Global Ltd, today held a groundbreaking ceremony for the first steelmaking facility in Minnesota's famous Iron Range.
The USD 1.6 billion facility will be North America's first mine-based steel plant and the single largest investment made in the Mesabi range in recent times.
The ceremony also marked the unveiling of Essar Steel Minnesota, LLC, the new name for the steelmaking project that was earlier known as Minnesota Steel.
ln 2007, Essar Steel Holdings acquired Minnesota Steel, which has more than 1.4 billion tonnes of iron ore resources in the Mesabi range.
Essar Group Chairman Shashi Ruia said, "We are excited about starting this project. Today's groundbreaking is another step towards our goal of building a large presence in the steel sector in the Americas. We thank Governor Pawlenty and the local administration for lending their support to our Iron Range project. Essar remains committed to North America with investments of over USD 4 billion in the region and currently employs more than 8,000 people here."
State and local officials, including Minnesota Governor Tim Pawlenty, joined senior officials from the Essar Group to break ground at the site near Nashwauk.
Minnesota Senator Tom Saxhaug remarked on the merit of the project, "Essar Steel Minnesota is an excellent example of the kind of economic development we want and need on the Iron Range. The project not only will mine iron ore, it also will make steel-generating value-added benefits and creating high-tech jobs for our people. This is an example of how various institutions and hard-working people can get together to do a project that some thought was impossible."
The Honorable Bill Hendricks, Mayor of Nashwauk added, "Everybody in Nashwauk is so excited that this day has finally come. We know that it is a historic event and we couldn't be happier. We realize that this project will be a huge boost to the economy for NE Minnesota. We look forward to this joyous day of celebration."
Besides iron ore mining and production, the project will include a concentration plant, a pellet plant, a Direct-Reduced Iron (DRI) plant and steelmaking facilities. At full production Essar Steel Minnesota will employ nearly 500 people, and up to 2,000 construction workers over the course of the project. Iron ore pellets will be produced within about two years from the start of construction. Production of DRI pellets and steel slabs is expected to begin the fifth and the sixth year onwards, respectively.
Speaking on the occasion, Madhu S Vuppuluri, President and CEO of Essar Minnesota Steel, LLC, said: "We are delighted to start this mine based project in the prolific Mesabi range, which is one of the largest sources of high quality iron ore for US steelmakers. This is integral to our strategy to become an efficient global steelmaking company."
The production from this facility will also support the Essar Steel Algoma plant in Sault Ste Marie, Ontario, Canada. Essar acquired the Algoma plant in 2007 and has committed a capex of USD 500 million in the next five years. Following the acquisition, Essar Steel Algoma increased its capacity from 2.4 MTPA to 4 MTPA in less than a year. The synergies between the Minnesota and Algoma facilities will strengthen Essar's presence as an integrated steelmaker, with high value-added products, in the North American market.
The Iron Range project will be located at the site of the former Butler Taconite operation.