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• The
History •
This proposed $1.6 billion steel mill
complex already has overcome significant obstacles.
About the time Butler Taconite was dismantled, the domestic iron
ore and traditional steel industries endured a recession that saw
drastic reductions in the tonnages produced and a staggering
decline in the number of people employed. Although the ore body
remained an excellent one, mining and steel companies struggling
to get by had no appetite for—or capital to develop—another mine.
As the industry began picking up steam in the mid to late ‘90s,
attempts were made by a company called Minnesota Iron and Steel
(MIS) to generate interest in steelmaking at the site. However,
lack of resources to adequately qualify the ore reserves,
inexperience in developing a project of this complexity, a
downturn in steel prices and skepticism from an industry
accustomed to using iron ore only in a blast furnace model
combined to thwart MIS’ efforts.
MIS’ failure frustrated many who dreamed of making steel on the
Iron Range and reinforced skeptics. In addition, the company’s
many supporters were concerned that their support of the project
would come to nothing.
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• The
Birth of Essar Steel Minnesota •
 Essar Steel Minnesota learned from the missteps of MIS.
Convinced of the viability of the project, the company redoubled its
efforts—examining what went wrong, correcting flaws in the
business plan and re-establishing rapport with key supporters.
Original board members guiding the Essar Steel Minnesota project included descendants of Russell
Bennett and John M. Longyear, who were involved in developing the
Mesabi Range in the 1800s. Mr. Longyear was inducted into the
National Mining Hall of Fame in 2005 in recognition of his
unmatched "nose for iron ore." Former board Chairman Joseph C. Bennett has a
40-year history in the mineral industry, rising from a cub
engineering position on the Mesabi to executive and board
leadership positions with mining companies from around the world.
Stephen Hicks, former vice chairman, has held a variety of senior
management positions in finance, operations and strategy
development in the natural resource sector and is currently
president and CEO of J.M. Longyear’s operations.
Market
due diligence was undertaken and the basic business
underpinnings were verified by outside consultants. This
preliminary work led to the formation of Essar Steel Minnesota, a new
company with the focus, expertise and resources to realize the
dream of making steel on the Iron Range.
Third-party validation of the Butler ore body documented bankable
reserves on a 20-year mine plan of 250 million tonnes of ore and
total reserves of more than 1,400 million tonnes. The company secured leases for all of these ore reserves.
Essar Steel Minnesota’s former board also assembled an executive team with
the experience, skills and support needed to develop a complex
project, create a profitable mining and steelmaking operation with
a sustainable cost advantage and meet strict environmental
expectations.
Executive Vice President Howard Hilshorst spent 30 years in
management positions in mining industry, most recently as
president and CEO of EVTAC, a 5 million ton iron ore operation.
Debra McGovern, director of environmental and regulatory affairs,
has 26 years experience in environmental review and permitting,
both in regulatory agencies and the private sector.
This leadership team brings to the table proven experience in
building a state-of-the-art steelmaking facility, planning and
operating an iron mine and running environmentally sound
operations. The team’s work is supported by a cadre of engineers
and other mining and steel professionals. Clearly, Essar Steel Minnesota
has the skill and support to realize the long-held dream of
steelmaking on Minnesota’s iron range.
In April 2007, Minnesota Steel was purchased by India-based Essar Steel
Holdings Limited, a wholly owned subsidiary of Essar Global Limited,
an international conglomerate operating in six business areas—steel,
oil and gas, power, communications shipping and logistics, and
construction. Essar Global has offices worldwide and employs more than
20,000 people, including more than 3,500 in the U.S. alone.
Essar Steel Holdings Limited is an emerging global steel company and one
of the lowest cost producers in the world. The company is India’s largest
exporter of flat steel. It also operates a complex in Indonesia, with plans
to develop an integrated steel mill in Trinidad and Tobago and a hot strip
mill in Vietnam. Just prior to the purchase of Essar Steel Minnesota, Essar
acquired Canadian-based Algoma Steel; the two purchases combined form the
basis for the company’s North American Strategy.
Essar Steel Minnesota:
The resources. The technology. The
future of steel. |
