When an $1.8 billion project sits half finished, and it was expected to rehab a historic, though languishing industrial region of the United States, people start to protest and panic. That’s what was happening around the Essar Steel site in Nashwauk, MN. “We were legally robbed by Essar. Look what they did to our land. Shame on our government official for not protecting us from these pirates,” said one social media commentator when local reports surfaced last February that contractors were off the site and waiting for millions in payments from Essar
Since then, Essar says it did $800 million in private equity deals to bring the taconite pellet plant to financial close, and make contractors “whole.” Essar said state officials toured the site in late October and acknowledge that construction was resuming at the site.
The following is from a Oct. 23 press release:
“With the September 30th closing of its financing package for the entire $1.8 billion project, ESML received a cash infusion of approximately $800 million from equity contributions from sponsor Essar Global Fund Limited and debt financing to be utilized for completing construction of the project and ramping up operations. With close to 100% of engineering complete, about 90% in value of procurement orders released and 50% of construction activities completed for the project, ESML remains on schedule to commence production of iron ore pellets in the second half of 2015.”
ESML expects to be the lowest cost producer of taconite pellets in North America and will be the only pellet producer in the United States to have the flexibility and production capability to produce standard blast furnace pellets as well as fluxed and DR grade pellets. Through firm long-term off-take agreements in place with ArcelorMittal USA Inc. and Essar Steel Algoma Inc., ESML already has customers committed over the long term to purchase its entire 7 million tons of planned annual production capacity.
Essar is an Indian-based company with interests in the mining and power sectors.