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Kolkata, Sept. 17

Essar Steel has achieved financial closure for its $1-billion project for open-cast iron ore mining and construction of pit-head beneficiation and a six-million-tonne (mt) pellet plant at the West end of the Mesabi iron range in north-east Minnesota in the US.

Scheduled to be operational by August 2012, the Minnesota project (Essar Steel Minnesota LLC) will supply feedstock to the group's 4 mt steel plant at Algoma, across Lake Superior in Ontario, Canada.

“We have recently achieved financial closure for the $1-billion investment proposal in Minnesota,” Mr Malay Mukherjee, CEO of the Essar Steel Business Group, told mediapersons here on Friday.

Essar Steel Minnesota LLC has access to iron ore resources of over 1.4 billion tonnes. In the future, Essar plans to add a 2.5 mt sponge-iron making facility (DRI Plant) and slab caster at Minnesota.

Talking about the group's Indian operations, Mr Mukherjee said the 6 mt pellet plant at Paradip in Orissa would be operational this month. The Rs 2,200-crore project includes an 8 mt ore beneficiation plant at Joda in Barbil in Orissa and a 250-km slurry pipeline from Joda to Paradip.

The company plans to expand the beneficiation and pellet manufacturing capacities to 12 mt in the future.

“We will initially source iron from private mines around Joda. However, we expect the State and the Centre to grant us a captive mining lease in the longer run.”

The pellets produced at Paradip would be transported by sea to Essar's steel making capacity at Hazira in Gujarat, which is undergoing a capacity expansion to 9.6 mt from 4.6 mt. “The Hazira plant capacity will increase to 8 mt by March 2011 and 9.6 mt million tonne by 2012,” he added.

Steel distribution: In an initiative to enhance the scope of steel distribution and marketing, Essar plans to expand its Hypermart and Expressmart retail outlet networks. “We are planning to expand the Hypermart network from 100 to 125 and Expressmart from 419 to 650 by the close of this fiscal,” a company official said. The initiative will be backed by an expansion of its service facilities. The bulk of the expanded network will be located in Eastern and North-Eastern India where Essar is aiming to increase its market share substantially.

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Essar Steel to invest $1.6 b in Minnesota unit
Essar Steel consolidates presence in N. America

(This article was published in the Business Line print edition dated September 18, 2010)
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