Essar Group ties up funds for $1.8-bn Minnesota iron project

Essar Steel Monday said it has concluded the financing for the construction of its $1.8 billion, 7-million-tonne iron pellet project in Minnesota that also includes open-pit mining, crushing and processing of the ore.

"In the next 30-60 days, construction activities at the Essar Steel Minnesota site will focus on the completion of foundational and concrete work before winter freeze-up," the group said in a statement.

The Essar Group said it has already invested around $1 billion in the project so far and expected the actual production from the second half of 2015.

"By having completed the necessary financing for this project, we look forward to moving aggressively toward project completion and the commencement of production," said Madhu Vuppuluri, the project's president and chief executive.

Spelling out the highlights of the project, the group said besides giving employment to hundreds of local people, the project entailed a capital investment of $1.8 billion in the Mesabi Iron Range region of Minnesota in mid-west US.

"This is the largest economic development project on the range in over four decades," the group, said, adding mining life is estimated at over 70 years, which will support three generations of miners and their families.

"The project is estimated to generate $180 million per year in new tax revenues for the State of Minnesota at full capacity production."