USA: Essar Global Ltd., the owner of India''s third-biggest
steel maker Essar Steel, has agreed to buy Minnesota
Steel Industries LLC for an undisclosed price. The acquisition
will add 1.4-billion tons of iron-ore reserves and a
steel mill in North America to Essar''s assets.
to Minnesota Steel officials, Essar Global will invest
about $1.65 billion to build the 2.5-million-ton-a-year
mill in northern Minnesota. They said that the reserves
are enough for about a century''s steel production. Talking
about the synergies, analysts point out that it takes
two tons of iron ore to make one ton of steel, and so,
building a steel mill next to an iron mine can result
in significant savings in costs.
acquisition is the second announced by Essar this week.
Earlier on April 15, Essar Global, which owns 88 per
cent of Mumbai-based Essar Steel, agreed to buy Canada''s
Algoma Steel Inc. for $1.63 billion to supply U.S. carmakers
such as General Motors Corp. Algoma had shipped 2.42-million
tons of steel last year.
price of iron ore, the main material used in steelmaking,
has almost tripled in the past five years, which ahs
prompted companies, including Arcelor Mittal, to seek
greater control over supplies. Indian steelmakers, in
particular, are expanding abroad to secure access to
raw materials and more profitable steel-production facilities.
Steel, based in St. Paul, Minnesota, is building North
America''s first complex that will include iron-ore mining,
processing and steelmaking on a single site, according
to the company''s Web site. Accordingh to the company,
construction of the plant near Nashwauk is expected
to start in the third quarter, with production beginning
said its new mill will use electric arc furnaces to
produce semi-finished steel slabs that will be shipped
to clients in the US Midwest for finishing. The plant''s
costs to produce steel may be as much as 20 per cent
lower than for competing mini-mill operators, such as
Nucor Corp. or Steel Dynamics Inc., the company also
of Essar Steel have climbed 15 per cent this year.