Steel Market Update spoke with Steve Rutherford, Project Director of Essar Steel Minnesota, regarding the status of the Essar Steel Minnesota project.

For those who do not have Essar Steel Minnesota on your radar, this is a project located in Northern Minnesota which is being built in two phases: first, a open pit mine, Concentrator and Pellet Plant operation which would then be followed by a DRI Plant, EAF and Slab Casters as well as a vacuum degasser.

Originally called Minnesota Steel the operation was purchased by Essar Steel out of India in 2007. Since then Essar Steel Minnesota has gone through the permitting process on the first 4.1 million tons of pellets which would be used in the production of carbon steel. According to Mr. Rutherford the company is scheduled to begin pellet production in late 1st Quarter 2013.

The company is in the permitting process on additional pellet production which would take the annual capacity up to 7.0 million tons per year. The company hopes to have the permits completed by the end of April 2012. The company “hopes” to be able to ramp up pellet production to the 7.0 MTPA level by late 3rd to 4th Quarter 2013.

The Essar Steel Minnesota original permitting called for both a DRI and Steel Making facility along-side the open pit mine and pellet operation. The ultimate plan is for the plant to produce slabs which could then be rolled into plate and flat rolled steel products (at other locations).

When asked about the plans for an EAF and Slab Casting operation Mr. Rutherford told SMU there would not be any steel making until at least “2015…once the steel market returns.” He went on to tell us, “We would have to displace tonnage in North America or globally and we don’t see that happening any time soon.”

The pellets which will be produced by Essar Steel Minnesota will have all of the fluxes added to the pellet which makes for highly productive iron making when charged into an EAF or Blast Furnace. Customers will include Essar Steel Algoma, other North American mills as well as mills located outside of North America.

Essar Steel Minnesota has 1.938 billion tons of Magnetite along with 10 million tons of Hermatite and 200 million tons of Banded Hermatite available to mine.

Here is the most recent status update of the 1st Phase of the project: