MINNEAPOLIS (AP) — Essar Steel Minnesota is delaying the opening of its Nashwauk taconite plant until the second half of 2014, company officials have confirmed.
The plant originally was to open this fall with nearly 350 workers. But CEO and President Madhu Vuppuluri told the Star Tribune (http://bit.ly/15zj7U8 ) on Thursday that the opening is being delayed due to financing issues surrounding the company's decision last year to increase production from 4 million tons of taconite to 7 million tons.
The original plan called for $1.1 billion in spending. The new plan requires Essar to spend $1.7 billion. The company already has spent $1.1 billion.
Vuppuluri said the company is "at the advanced stages of" securing the additional $600 million needed to finish the project.
All the concrete foundations have been poured and a few steel beams have been erected at the plant site in Nashwauk, 90 miles northwest of Duluth. Essar's giant ore crushers have been installed. Over the next year, the remaining steel beams and factory walls must be erected and other equipment installed.
Currently, about 100 Essar workers are on site, along with up to 300 construction workers.
Allete Inc., parent company of Duluth-based Minnesota Power, informed shareholders of Essar's delay during a conference call Thursday. Minnesota Power is scheduled to sell 110 megawatts of power to run the Essar plant.
Tony Sertich, commissioner of the Iron Range Resources and Rehabilitation Board, said the state learned about Essar's delay two weeks ago.
"They have been under construction for the past two years. Projects of this size and scope sometimes have delays," Sertich said. "This just pushes back the time frame for them to hire. But as soon as construction starts again, they will be looking ahead."
The delay will not affect Essar's $6 million loan with the IRRRB, Sertich said.