September 08, 2008

Essar to announce groundbreaking for Minnesota Steel

Duluth & Superior Newspaper reported that Essar Steel Holdings, developer of the proposed Minnesota Steel project near Nashwauk, is expected to announce a groundbreaking date for the project later in April 2008.

It remains unclear whether Essar’s vision for Minnesota Steel has changed since it bought the company’s assets from its founders in mid 2007. They proposed North America’s first steel mill at a mine site, near the former Butler Taconite operation.

The mine and taconite operation near Nashwauk closed in 1983. Along the way and before the sale to Essar, Minnesota Steel scaled back the project scope from an operation making finished steel to one producing 2.5 million tonnes of lower margin, semi finished steel slabs per year. That significantly reduced startup costs but the scaled down concept still carried an estimated USD 1.6 billion price tag and a promised 700 permanent mill jobs.

Minnesota Steel secured all required environmental permits before the sale to Essar last year. While Essar has not made its plan public, Anzelc and other Iron Range legislators have championed USD 30 million in state bonding for Itasca County to help finance infrastructure improvements for the project. Anzelc said a state bonding bill with the project financing could be ready for floor votes in both legislative houses in early April 2008.