Apr 20 2007
Essar Global Limited, through its wholly owned subsidiary - Essar Steel Holdings Limited, (“Essar”) and Minnesota Steel LLC. (“Minnesota”) today announced that an agreement has been executed to acquire Minnesota Steel LLC; a US based steel company which controls iron ore resources of over 1.4 Billion tonnes.
Minnesota Steel plans to set up an integrated steel plant at an estimated cost of USD 1.65 billion. The steel plant will have an annual capacity of 2.5 million tonnes when completed.
Construction is expected to begin in the third quarter subject to necessary environmental and regulatory approvals.
The steel plant will be built in phases with the first phase expected to go on stream in 2009 and produce up to 1.5 million tonnes of thick steel slab per year.
Minnesota Governor Tim Pawlenty hailed the closing of Minnesota Steel’s strategic partner. “This investment is a tremendous milestone, not only for the company but also for the State,” Governor Pawlenty said. “It moves us much closer to the goal of making steel on the Iron Range.”
Essar Global Chairman, Shashi Ruia said his company is looking forward to expanding operations into North America. “Our investment in Minnesota Steel is exciting as it gives us a cornerstone in the North American market. From this we will further expand our global steel business,” he said.
“By developing this significant iron ore resource Minnesota Steel has the opportunity to be one of the low cost producers of steel in the world” Mr. Ruia added.
“We are very pleased to have Essar as our partner going forward,” said Joseph C. Bennett, chairman of Minnesota Steel. “Essar bring remarkable experience and expertise in Direct Reduced Iron (DRI)/Electric Arc Furnace (EAF) steelmaking.
“Essar has a track record of building projects of this scale in India. In addition, the Company is very environmentally aware,” Mr. Bennett said. “Their commitment to be good stewards of the environment echoes our own.”
John Elmore, president and CEO of Minnesota Steel, highlighted Essar’s commitment to the communities in which it operates. “They have shown in their operations around the world that it’s very important to them to work with the local community and with local individuals, which fits well with our philosophy,” Mr. Elmore said. “They are a strong partner for us and for the state.”
Essar has recently executed an agreement to acquire Algoma Steel, Canada subject to approvals. Together, Minnesota Steel and Algoma Steel form the corner stone for Essar’s North American strategy in line with the global steel vision of having world class low cost assets, with a global footprint.