Essar Steel Ltd said it may invest about USD 300 million to expand its planned iron ore mine and pellet plant in Minnesota to supply raw materials to a steel mill at the site and another at Ontario in Canada.

Mr Kevin Kangas safety and environmental director for the Essar facility said in an interview that the capacity of the plant in Nashwauk, Minnesota, will be boosted by 59% to 6.5 million tonnes a year from the 4.1 million tonnes for which the company has permits.

He added that the proposal must be reviewed by the state’s Department of Natural Resources

Mr Kangas said that Essar can begin work on the portion of the mine and pellet plant that already was approved, while seeking state approval of the expansion

The new investment is in addition to the USD 1.6 billion already planned for the project’s original scope, which also includes a steel plant with capacity to produce 2.5 million tonnes of the metal a year.

The pellet plant is expected to start production in the second half of 2012, about six months later than originally projected, after lining up financing took longer than expected.

Essar bought the former operations of Minnesota Steel in 2007.

(Sourced from Bloomberg)