Essar Steel Holdings Limited, part of Essar Global Limited, has, on receipt of regulatory and environmental approvals, completed the acquisition of Minnesota Steel LLC, a US based steel company with estimated reserves of over 1.4 billion tonnes of iron ore located on the Mesabi iron range in northeast Minnesota Minnesota Steel will commence the project activities soon upon achieving the financial closure. This is one of the largest acquisitions by an Indian group in Minnesota. Madhu Vuppuluri, President, Essar, North America, said “Together with Minnesota Steel and Algoma Steel, we are optimistic about creating a new and vibrant steel manufacturing capability in North America.” Commenting on the acquisition, Shashi Ruia, Chairman, Essar Global said “This acquisition follows our purchase of Canada’s Algoma Steel earlier this year. These acquisitions are in line with our strategy of having a geographical spread close to high value steelmarkets as well iron ore sources. Essar’s steel business is now poised to consolidate its position as a low cost, high value producer of carbon steel.” Essar recently acquired Algoma Steel, Canada which has capacity of 4 million tonnes per annum. Essar Steel also plans to set up set up steel making facilities in Trinidad & Tobago, Vietnam and Eastern India, besides enhancing its steel capacity at its plant in Hazira, India, where it is the largest producer of flat steel in western India.
NOTES TO EDITORS: About Minnesota Steel
Minnesota Steel is planning to develop, finance and construct a new steel production facility. The Company will combine a high-quality ore body with modern and commercially proven technology to develop a vertically integrated steel mill. It will be the first facility in North America to include iron ore mining, ore processing, direct reduction and steelmaking on a single site. For further information, please visit www.minnesotasteel.com
In addition to the 2,000 construction jobs, Minnesota Steel will create up to 700 full-time jobs and generate 2,100 spin-off jobs.
Earlier this month, the 45-day public comment period on the project’s draft environmental impact statement ended. Once the environmental impact statement is found to have addressed all potential impacts, Federal and State environmental officials can issue permits which are anticipated this summer. Construction will begin thereafter.
In December, the State of Minnesota approved a 7,000-plus acre land swap to ensure Minnesota Steel will have enough acreage for its operation.
In November, Minnesota Steel secured capacity to transport low-cost natural gas from Alberta, Canada, via the Great Lakes Gas Transmission Co.—locking in transport capacity, which is extremely limited, and saving up to 70% on transmission rates.
About Essar Global
Essar Global is an international conglomerate operating in six business areas – steel, oil & gas, power, communications, shipping & logistics and construction. It has offices world-wide and employs approximately 20,000 people, including over 3500 persons in the United States. The group has an enterprise value of approx. USD 20 billion. For further information, please visit: www.essar.com
Essar Steel Holdings is a global producer of steel 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 - supplying highly discerning customers in the automotive, white goods, construction, engineering and shipbuilding industries. With a current capacity of 9 million tonnes, Essar’s expansion in India, Asia and North America will see capacity rise to 20 to 25 million tonnes by 2012.
For further information, please contact:
Governor Tim Pawlenty.
Minnesota Governor Tim Pawlenty said today that Essar Global has committed to fully comply with all U.S. and international law, including those prohibiting certain investments in Iran, and that he will support continued state assistance for Essar’s proposed steel project on the Iron Range.

A few days after Indian company Essar Steel Holdings Limited acquired Minnesota Steel LLC, the governor of Minnesota announced that he "will strongly oppose any effort to provide state financial assistance to companies or entities that engage in prohibited business practices with Iran."  

Governor Pawlenty recently returned from a trip to India.  He learned that Indian company Essar Global Limited is pursuing a project to build a refinery in southern Iran.

There is no official word yet from Essar Group, but Iran's Petroenergy Information Network says Essar Group is expected to take a 60% stake in the project and that Essar's Ravi Ruia was negotiating for the project in Iran last week.

The northern Minnesota project will be the first facility which includes all steps in steel production from iron mining to a US$1.65 billion steel mill.  The Iranian refinery will have a capacity of 300,000 barrels per day and cost $8-10 billion.