October 12, 2008

Essar completes buyout of Minnesota Steel

It is reported that Essar Steel has closed a deal to purchase US based Minnesota Steel for an undisclosed amount and will now begin planning for construction of the USD 1.6 billion project which is likely happen by early 2008.

Now Essar controls all of the assets of Minnesota Steel, including the all important permits. This financial close triggers a few things. Now Itasca County can start using more of the bonding money secured in the past years and move forward on crucial infrastructure. They can also officially sign on Anacostia Pacifica, as the shortline railroad operator.

The next part of the financing package will be to secure debt financing. That's the financing that will be used to pay for the construction of the USD 1.6 billion dollar plant near Nashwauk.

When completed the facility would be the first steelmaker on the Minnesota Iron Range, which would produce 2.5 million tonnes slabs per year. The slabs produced here would feed Algoma Steel which Essar bought in April 2007.