Minnesota Steel To Be Purchased By India's Essar Global

Minnesota Steel is buidling a $1.65 billion steel plant on Mesabi iron range in northeast Minnesota.

Essar Global Ltd., an Indian conglomerate, announced Wednesday its acquisition of Minnesota Steel LLC, a steel company that has iron ore resources of over 1.4 billion tons.

Minnesota Steel is planning to invest approximately $1.65 billion to build an integrated steel plant, on the Mesabi iron range in northeast Minnesota. The facility, which will have a capacity of 2.5 million tons annually, will be the first in North America to include iron ore mining, ore processing, direct reduction and steelmaking on a single site.

In addition to 2,000 construction jobs, Minnesota Steel will create up to 700 full-time jobs and generate 2,100 spin-off jobs.

Construction is expected to start in the third quarter of 2007, with the first phase planned to go on stream in 2009, producing up to 1.5 million tons of thick steel slab yearly.

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.”

According to Essar Global Chairman, Shashi Ruia, the investment in Minnesota Steel allows the company to expand its presence in the North American market and its global steel business.

“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,” Ruia said.

Recently, Essar announced its acquisition of Canada's Algoma Steel.

Essar Global has operations in six business areas – steel, oil & gas, power, communications, shipping & logistics and construction. The company has about 20,000 employees, including moe than 3,500 in the U.S.