NOVEMBER 2008

Essar Steel lays foundation of steel facility in Minnesota’s Iron Range

Essar Steel Holdings Ltd, a part of Essar Global Ltd, began building the first steelmaking facility in Minnesota's famous Iron Range.

The $1.6 billion facility will be North America's first mine-based steel plant and the single largest investment made in the Mesabi range in recent times.

The ceremony also marked the unveiling of Essar Steel Minnesota, LLC, the new name for the steelmaking project that was earlier known as Minnesota Steel.

In 2007, Essar Steel Holdings acquired Minnesota Steel, which has more than 1.4 billion tonnes of iron ore resources in the Mesabi range.

State and local officials, including Minnesota Governor Tim Pawlenty, joined senior officials from the Essar Group to break ground at the site near Nashwauk.

Besides iron ore mining and production, the project will include a concentration plant, a pellet plant, a Direct-Reduced Iron (DRI) plant and steelmaking facilities. At full production, Essar Steel Minnesota will employ nearly 500 people, and up to 2,000 construction workers over the course of the project. Iron ore pellets will be produced within about two years from the start of construction. Production of DRI pellets and steel slabs is expected to begin the fifth and the sixth year onwards, respectively.

The production from this facility will also support the Essar Steel Algoma plant in Sault Ste Marie, Ontario, Canada. Essar acquired the Algoma plant in 2007 and has committed a capex of $500 million in the next five years. Following the acquisition, Essar Steel Algoma increased its capacity from 2.4 MTPA to 4 MTPA in less than a year.