Money to be spent on acquired firms in Canada and US
Essar Steel Holdings, a part of Essar Global, has lined up investments of more than $4 billion (over Rs 18,000 crore) in North America.
The investments would be made in the company’s acquired companies, Algoma in Canada and Minnesota Steel in the US, as well as greenfield plants in Trinidad and Tobago.
The groundbreaking ceremony for the first steelmaking facility in Minnesota’s Iron Range was held today.
Speaking on the occasion, Shashi Ruia, the Essar group chairman, said, the group remained committed to North America with investments of over $4 billion in the region and currently employs 8,000 people. Essar Global, which owns 88 per cent of Essar Steel, bought Algoma Steel -- which includes 1.4 billion tonne of iron ore in the Mesabi range -- last year for $1.63 billion to gain access to North American markets and supply the alloy to carmakers such as General Motors.
Ruia said, “We are excited about starting this project. Today’s groundbreaking is another step towards our goal of building a large presence in the steel sector in the Americas.” Besides iron mining and production, the $1.6-billion project would include a concentration plant, a pellet plant, a direct reduced iron (DRI) plant and steelmaking facilities.
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At full production, Essar Steel Minnesota would employ nearly 500 people and up to 2,000 construction workers over the course of the project. Iron ore pellets would be produced within two years from the start of construction. Production of DRI pellets and steel slabs were expected to begin the fifth and sixth year onwards, respectively.
Minnesota Senator Tom Saxhaug said, “Essar Steel Minnesota is an excellent example of the kind of economic development we want and need on the iron range. The project not only will mine iron ore, it will also make steel-generating value-added benefits and creating high-tech jobs for our people."
Bill Hendricks, Mayor of Nashwauk added, "We realize that this project will be a huge boost to the economy for NE Minnesota."
The production from the facility would also support the Essar Steel Algoma in Sault Ste Marie, Ontario in Canada.
Essar has committed a capital expansion of $500 million in Algoma in the next five years. Following the acquisition, Essar Steel Algoma increased its capacity from 2.4 to 4 million tonnes in less than a year.
The company believes that the synergies between the Minnesota and Algoma facilities would strengthen Essar’s presence as an integrated steelmaker with high value-added products, in the North American market.