Essar Lays Foundation of First Steel Facility in Iron Range



    
    -  To invest USD 1.6 billion in setting up North America's first
       mine-based steel plant

    -  Single largest investment in the Mesabi range in recent times

    -  Essar Steel Minnesota has resources totaling 1.4 billion tonnes of
       high quality iron ore in the Mesabi range

    -  Project will include iron ore mining and production, concentration
       plant, pellet plant, DRI plant and steelmaking facilities

    -  Minnesota Steel renamed to Essar Steel Minnesota, LLC
    

    NASHWAUK, MN, Sept. 19 /CNW/ - Essar Steel Holdings Ltd, a part of Essar
Global Ltd, today held a groundbreaking ceremony for the first steelmaking
facility in Minnesota's famous Iron Range.
    The USD 1.6 billion facility will be North America's first mine-based
steel plant and the single largest investment made in the Mesabi range in
recent times.
    The ceremony also marked the unveiling of Essar Steel Minnesota, LLC, the
new name for the steelmaking project that was earlier known as Minnesota
Steel.
    In 2007, Essar Steel Holdings acquired Minnesota Steel, which has more
than 1.4 billion tonnes of iron ore resources in the Mesabi range.
    Essar Group Chairman Shashi 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. We thank
Governor Pawlenty and the local administration for lending their support to
our Iron Range project. Essar remains committed to North America with
investments of over USD 4 billion in the region and currently employs more
than 8,000 people here."
    State and local officials, including Minnesota Governor Tim Pawlenty,
joined senior officials from the Essar Group to break ground at the site near
Nashwauk.
    Minnesota Senator Tom Saxhaug remarked on the merit of the project,
"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 also will make steel - generating value-added benefits and
creating high-tech jobs for our people. This is an example of how various
institutions and hard-working people can get together to do a project that
some thought was impossible."
    The Honorable Bill Hendricks, Mayor of Nashwauk added, "Everybody in
Nashwauk is so excited that this day has finally come. We know that it is a
historic event and we couldn't be happier. We realize that this project will
be a huge boost to the economy for NE Minnesota. We look forward to this
joyous day of celebration."
    Besides iron ore mining and production, the project will include a
concentration plant, a pellet plant, a Direct-Reduced Iron (DRI) plant and
steelmaking facilities. At full production Essar Steel Minnesota will employ
nearly 500 people, and up to 2,000 construction workers over the course of the
project. Iron ore pellets will be produced within about two years from the
start of construction. Production of DRI pellets and steel slabs is expected
to begin the fifth and the sixth year onwards, respectively.
    Speaking on the occasion, Madhu S Vuppuluri, President and CEO of Essar
Minnesota Steel, LLC, said: "We are delighted to start this mine based project
in the prolific Mesabi range, which is one of the largest sources of high
quality iron ore for US steelmakers. This is integral to our strategy to
become an efficient global steelmaking company."
    The production from this facility will also support the Essar Steel
Algoma plant in Sault Ste Marie, Ontario, Canada. Essar acquired the Algoma
plant in 2007 and has committed a capex of USD 500 million in the next five
years. Following the acquisition, Essar Steel Algoma increased its capacity
from 2.4 MTPA to 4 MTPA in less than a year. The synergies between the
Minnesota and Algoma facilities will strengthen Essar's presence as an
integrated steelmaker, with high value-added products, in the North American
market.
    The Iron Range project will be located at the site of the former Butler
Taconite operation.

    
    About Essar Global
    ------------------
    

    Essar Global Limited (EGL) is a diversified business corporation with a
balanced portfolio of assets straddling the manufacturing and services sectors
of Steel, Energy, Power, Communications, Shipping Ports & Logistics,
Construction and Mining & Minerals. EGL has a firm value of approximately USD
50 billion and employs more than 40,000 people across offices in Asia, Africa,
Europe and the Americas.

    
    Note to Editors
    ---------------
    

    Essar Steel Holdings Ltd is a global producer of steel with a footprint
covering India, Canada, USA, the Middle East and Asia. It is a fully
integrated flat carbon steel manufacturer - from iron ore to ready-to-market
products. Essar Steel has a current capacity of 9 million tonnes per annum
(MTPA). With its aggressive expansion plans in India as well as Asia and the
Americas, its capacity will go up to 20 to 25 MTPA. Its products find wide
acceptance in highly discerning consumer sectors, such as automotive, white
goods, construction, engineering and shipbuilding.
    In 2007, Essar Steel acquired Algoma Steel in Canada, which has a
capacity of 4 MTPA, and Minnesota Steel, which controls iron ore resources of
over 1.4 billion tonnes. The Company is building a steel plant in Minnesota.
In Indonesia, it operates a 400,000 TPA cold rolling complex with a
galvanizing line of 150,000 TPA, making it the largest private steel company
in that country. Additionally, Essar is setting up a 2 MTPA hot strip mill in
Vietnam and a 2.5 MTPA integrated steel plant in Trinidad & Tobago.
    Essar Steel is the largest steel producer in Western India, with a
current capacity of 4.6 MTPA at Hazira, Gujarat, and plans to increase this to
10 MTPA. The Indian operations also include an 8 MTPA beneficiation plant at
Bailadilla, Chattisgarh, and an 8 MTPA pellet complex at Visakhapatnam.
Additionally, Essar is setting up a 6 MTPA integrated steel plant in Paradip,
Orissa.
    The Essar Steel complex at Hazira in Gujarat, India, houses the world's
largest gas-based, single location, sponge iron plant with a capacity of 5.5
MTPA. The complex also houses the steel plant and the 1.4 MTPA cold rolling
mill. The steel complex has a complete infrastructure setup, including a
captive port, lime plant and oxygen plant.





For further information:

For further information: For media queries: India: Sharad Goel, Group
Head - Media Relations, Essar Group, Tel: +91 22 6660 1858, Email:
sharad.goel@essar.com; B Ganesh Pai, General Manager - Corporate
Communications, Essar Group, Tel: +91 98197 30225, Email:
ganesh.pai@essar.com; Canada: Brenda Stenta, Manager, Corporate
Communications, Essar Steel Algoma, Tel: (705) 945-2209, Email:
bstenta@algoma.com; United Kingdom: William Clutterbuck, Maitland PR, Tel: +44
207 379 5151, Email: wclutterbuck@maitland.co.uk

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ESSAR GLOBAL LIMITED

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