A quiet revolution is sweeping through the global iron
ore markets, kicked off in early 2012 when Essar Steel
Minnesota LLC announced that its Nashwauk, Minn., taconite
property on the Mesabi Range, about 100 miles west of Lake
Superior, contained far more ore-bearing rock than it had
Taconite is a low-grade iron ore that makes up the
main feedstock for the blast furnaces operated by the U.S.
integrated steel industry. Taconite rock is extracted from
open-pit mines, crushed to the consistency of talcum powder in
mammoth ball and grinding mills, rolled into marble-sized
pellets and heated to 2,500 degrees Fahrenheit. Once hardened,
the pellets are shipped down the Great Lakes aboard bulk ore
carriers to the steel mills.
The measured, indicated and inferred resources
of nearly 2 billion (tonnes) at Essar Steel Minnesotas
iron ore project exceeded our expectations, said Madhu
Vuppuluri, president and chief executive officer of Hibbing,
Minn.-based Essar Steel Minnesota, a subsidiary of Indias
Essar Steel Group, noting that some 95 percent of total
measured and indicated resources are made up of mineral
Essar Steel Minnesota has received the federal and
state permits required to build facilities at Nashwauk and
produce 4.1 million tonnes of taconite pellets each year,
Vuppuluri said. The first phase of construction of the iron ore
minecrushing facilities, concentrator and pellet
plantgot under way in October 2010 and is expected to be
up and running late this year or early next year.
Much of the first-phase production from the Nashwauk
pellet facility is destined for Essar Steel Algoma Inc., an
integrated steel mill complex in Sault Ste. Marie, Ontario.
Essar Steel Algoma, which was purchased by Essar Global Ltd. in
2007, is the third-largest steel producer in Canada, producing
about 2.8 million tonnes of steel annually. With the 4 million
tonnes of pellets expected to go online in Minnesota, Essar
will essentially be able to supply all of its resource needs at
the Algoma mill, since about 1.4 tonnes of pellets go into each
tonne of finished steel. The additional pellet capacity of
nearly 3 million tonnes would be enough to feed an expansion at
Algoma or to allow Essar to sell pellets on the spot market,
either in North America or overseas.