Essar Steel Minnesota LLC (ESML), a wholly-owned subsidiary of Essar Resources Inc, is building a state-of-the-art open pit mining, concentrating and pelletizing plant. This started as a greenfield pellet plant project in northern Minnesota, on the western end of the Biwabik Iron Formation (the Mesabi Range), with a 19,000-acre project boundary, of which 4,360 acres are mineral lease land. ESML has measured and indicated mineral resources of approximately 1,768 million metric tons (MMT) of iron ore as well as inferred mineral resources of approximately 201 MMT of iron ore. Construction and development of the project commenced in October 2010. ESML expects operations to commence in the second quarter of 2014, ramping up to an annual production capacity of 7 million tons per annum (MTPA) in quarter four of 2014.
All of the required Federal and State regulatory permits and approvals for the 7 MTPA pelletizing capacity have been received. Permits and approvals for 1.8 MTPA of direct reduced iron (DRI) and 1.5 MTPA of electric arc furnace based steel are also in place. Project financing is fully committed for the commissioning of 4.1 MTPA pelletizing capacity, while obtaining additional project financing for the incremental 2.9 MTPA is in process.
ESML has the flexibility to produce standard, fluxed and direct reduction grade pellets. ESML looks to be one of the lowest cost producers of pellets in North America, due to ore body characteristics of its location area and significant technological improvements since the building of the last pellet plant in the US in the 1970s. ESML is strategically located with multiple access points to a world-class ground transportation infrastructure to serve the North American market, and multiple vessel options for the international seaborne market.