Steel Dynamics and Kobe Steel to build iron plant in Minnesota
Steel Dynamics, Inc. (SDI) announced that its board of directors has approved
the company’s participation with Kobe Steel to construct and operate
a $235 million iron-making facility in the Hoyt Lakes region of Minnesota.
The project is contingent on successfully arranging financing
of the project, including discussions regarding economic development assistance
with the state of Minnesota, completion of a long-term supply agreement that
would assure the supply of iron concentrate needed for iron-nugget production,
securing certain land options, and other unresolved issues.
In November 2006, SDI announced that negotiations with
four other partners in Mesabi Nugget, LLC, had broken down due to complexities
involved in the multi-party arrangement. Kobe Steel and Steel Dynamics have
now formed a new legal entity to develop the project.
The new arrangement calls for Steel Dynamics to hold a
majority stake in the project and to be responsible for the construction
and operation of the facility. Kobe will provide a technology license, engineering
services, proprietary equipment and technical support to the project. The
initial production module is designed to have an annual production capacity
of 500,000 tons of iron nuggets.
Steel Dynamics anticipates that substantially all of the
nugget output of the first module will be consumed in SDI’s mini-mills, providing the
company with a constant supply of high-quality iron units. Melt tests using
nuggets produced by a pilot plant have demonstrated that iron nuggets melt
more efficiently in electric-arc furnaces than traditional pig iron.