Date:21/09/2008 URL: http://www.thehindu.com/2008/09/21/stories/2008092155531300.htm

Business

Essar starts work on U.S. facility

Special Correspondent

Breaks ground for the $1.6 billion project

Essar Steel Minnesota will employ 500 people
Iron ore pellets will be produced in two years

MUMBAI: Essar Steel Holdings Ltd (ESHL), a part of Essar Global Ltd, held a groundbreaking ceremony for the first steelmaking facility in Minnesota ’s famous Iron Range.

The $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. In 2007,

ESHL acquired Minnesota Steel, which has more than 1.4 billion tonnes of iron ore resources in the Mesabi range. The Iron Range project will be located at the site of the former Butler Taconite operation.

Essar Group Chairman Shashi Ruia said, “The groundbreaking is another step towards our goal of building a large presence in the steel sector in the Americas. Essar remains committed to North America with investments of over $4 billion in the region and now employs more than 8,000 people here.” 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 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.

The production from this facility will support the Essar Steel Algoma plant in Sault Ste Marie, Ontario, Canada . Essar acquired the Algoma plant in 2007 and has committed a capital expenditure of $500 million in the next five years.

ESHL is a fully integrated flat carbon steel manufacturer — from iron ore to ready-to-market products. Essar Steel has a current capacity of nine million tonnes annually and with its aggressive expansion plans in India, Asia and the Americas, its capacity will go up to 20-25 million tonnes annually.