Essar To Build $1.65 Billion Steel Plant In USA
According to Essar Steel, it will buy a U.S. company with substantial iron ore reserves and plans to build an advanced "mine mouth" steel plant in Minnesota.
Essar Steel, India's third-largest steelmaker said it would invest an estimated $1.65 billion in the plant and the company’s acquisition. Minnesota Steel holds 1.4 billion tons of iron ore reserves in the Mesabi range in northeast Minnesota; it had been planning to build an integrated plant that would integrate mining, processing and steel production on one site, whichcan result in cost savings of as much as 15-20%.
According to Chairman Mr J.C.Bennet of Minnesota "Essar has a track record of building projects of this scale in India. In addition, the company is very environment friendly," Construction on the plant, which Minnesota Steel says would be the first of its kind in North America, is expected to start in the third quarter and production will begin from 2009. It is likely to produce 2.5 million tons of raw steel slab annually.
Mr Shashi Ruia, Chairman Essar Global said "By developing this significant iron ore resource, Minnesota Steel has the opportunity to be one of the low-cost producers of steel in the world,". Earlier, Essar Steel said it had agreed to acquire Canada's Algoma Steel for $1.63 billion. Algoma is a key supplier of steel sheet to American Auto cos like the Ford & GM etc.
The Indian Steel cos are eying several acquisitions & are consolidating due to rise in steel prices due to strong demand in India and China.
Essar Steel operates an integrated steel plant in India that produces 4.5 million tons. It plans to expand capacity there to 8.5 million tons by 2009. Essar steel also plans to build steel plants in Vietnam and the Middle East.
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