Essar Global completes Minnesota acquisition
Our Corporate Bureau
25 October 2007
Essar Steel Holdings Limited, part of Essar Global Limited, has, on receipt of regulatory and environmental approvals, completed the acquisition of Minnesota Steel LLC, a US- based steel company with estimated reserves of over 1.4 billion tonnes of iron ore located on the Mesabi iron range in northeast Minnesota.
Minnesota Steel will commence project activities soon after achieving financial closure. This is one of the largest acquisitions by an Indian group in Minnesota.
Madhu Vuppuluri, President, Essar, North America, said "Together with Minnesota Steel and Algoma Steel, we are optimistic about creating a new and vibrant steel manufacturing capability in North America."
"This acquisition follows our purchase of Canada's Algoma Steel earlier this year," said Shashi Ruia, chairman, Essar Global. "These acquisitions are in line with our strategy of having a geographical spread close to high value steelmarkets as well iron ore sources. Essar's steel business is now poised to consolidate its position as a low cost, high value producer of carbon steel."
Essar had recently acquired Algoma Steel, Canada which has capacity of 4 million tonnes per annum (See: Algoma Steel shareholders approve $1.74 billion sale to Essar Steel). Essar Steel also plans to set up set up steel making facilities in Trinidad & Tobago, Vietnam and Eastern India, besides enhancing its steel capacity at its plant in Hazira, India, where it is the largest producer of flat steel in western India.
Minnesota Steel is planning to develop, finance and construct a new steel production facility. The company will combine a high-quality ore body with modern and commercially proven technology to develop a vertically integrated steel mill. It will be the first facility in North America to include iron ore mining, ore processing, direct reduction and steelmaking on a single site.
In November, Minnesota Steel secured capacity to transport low-cost natural gas from Alberta, Canada, via the Great Lakes Gas Transmission Co., locking in transport capacity, which is extremely limited, and saving up to 70 per cent on transmission rates.
Essar Global is an international conglomerate operating in six business areas - steel, oil and gas, power, communications, shipping and logistics and construction. The group has an enterprise value of approximately $20 billion. Essar Steel Holdings is a global producer of steel covering India, Canada, USA, the Middle East and Asia. It is a fully integrated flat carbon steel manufacturer - from iron ore to ready-to-market products - supplying highly discerning customers in the automotive, white goods, construction, engineering and shipbuilding industries. With a current capacity of 9 million tonnes, Essar's expansion in India, Asia and North America will see capacity rise to 20 to 25 million tonnes by 2012.