Essar Steel's Minnesota plant to go on stream next year

Suresh P. Iyengar Mumbai | Updated on November 15, 2017

Having enhanced its capacity to 10 million tonnes per annum in India, Essar Steel has moved a step closer to achieving raw material security with its US subsidiary getting the Department of Natural Resources approval for the second phase of enhancing pellet output.

Essar Steel Minnesota LLC (ESML) has already received permits for the construction of 4.1 million tonnes per annum of iron ore pellets. Work under phase one started in October 2010, with construction of the iron ore mine, crushing facilities, the concentrator and pellet plant. In the second phase, the capacity will be enhanced to 2.9 m.t. per annum.

Mr Madhu Vuppuluri, President and CEO, Essar Steel, Minnesota said the company should be able to start production at the proposed 4.1 m.t. pellet plant by first quarter of 2013.

“The production will be enhanced further to seven mt, taking the total investment to $1.4 billion (about Rs 6,000 crore) in Minnesota,” he said.

The company has tied up funding through a consortium of five Indian banks. The project will be funded in the debt equity ratio of 65:35.

ESML's taconite iron ore project located at Nashwauk, Minnesota, in the western part of the Mesabi Range, benefits from proximity to ports, rail and road connectivity. The project permit area encompasses about 19,200 acres.

Given its close proximity to a port and the current iron ore prices, it will be possible to export pellets to Essar Steel facility at Hazira in Gujarat, said Mr Vuppuluri. The company will also tap markets in North America, Canada and China.


The company has iron ore reserves of 1.77 billion tonnes, with a grading of 31.78 per cent total iron, along with inferred mineral reserves and resources estimated at 201 m.t., making it a leading iron ore resource holder in the North American basin.

“We believe that our project contains sufficient reserves and resources, not only to increase the planned production of iron ore pellets from 4.1 m.t. to 7 m.t. annually, but also will enable us to evaluate options to further utilise our increased mineral resources,” said Mr Vuppuluri.


Published on January 18, 2012

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