New Delhi: Essar Steel today said its US arm Essar Steel Minnesota (ESML) has achieved financial closure for its USD 1.8 billion iron ore pellet project with an annual production capacity of 7 million tonnes (MT).
The project with a USD 1.8 billion capital investment in the Mesabi Iron Range region of Minnesota is set to commence production of taconite pellets in the second half of 2015.
"ESML has succeeded in reaching a major financial milestone by closing the financing to complete construction of its fully permitted open-pit iron ore mine, crushing, concentrating and pelletising facilities, which will have an annual pellet production capacity of 7 MT," the company said in a statement.
The project is estimated to generate USD 180 million per year in new tax revenues for the State of Minnesota at full capacity production besides creating employment.
With this financing in place, ESML will now aggressively ramp up procurement and construction activities at the project site.
"In the next 30 to 60 days, construction activities at the ESML site will focus on completion of foundational and concrete work before winter freeze-up," it said, adding that extensive construction activities will continue at the project site during winter months with focus on erecting steel for numerous structures; installation of sheeting on buildings; and installation of machinery and equipment in the facilities.
"ESML already has invested approximately USD 1 billion in the project to date," it said.
ESML President and CEO Madhu Vuppuluri commented: "This truly is a momentous occasion for our company and for the Iron Range as we now have in place the necessary financing to complete this historic project, which will be a tremendous economic engine to the benefit of the Iron Range and its residents for the next several decades."
By having completed the necessary financing for this project, we look forward to moving aggressively towards project completion and commencement of production, he said.
The mine reserves are expected to last over 70 years, which will support three generations of miners and their families.
ESML claimed it is the only facility in the US with the flexibility to produce standard, fluxed and DR grade pellets.
ESML is an iron ore producer engaged in the development of a 7 MTPA fully-integrated pellet production facility in the western Mesabi Range in northern Minnesota.
ESML has an aggregate of approximately 1.8 billion tonnes of measured and indicated magnetite iron resources, of which approximately 1.7 billion tonnes are classified as proven reserves.