Essar Steel Minnesota was acquired by Essar Steel Holdings Ltd in October 2007. Essar Steel is a global producer of steel with a footprint covering India, Canada, USA, Middle East and Asia. It is a fully integrated flat carbon steel manufacturer--from iron ore to ready-to-market products. Its products find wide acceptance in highly discerning consumer sectors, such as automotive, white goods, construction, engineering and shipbuilding. It is India’s largest exporter of flat steel products and aims to reach 25 MTPA capacity by 2012.

The Essar Steel Minnesota project will be a conventional open pit mining, concentrating and pellet plant operation followed by a DRI plant and slab caster. The company has secured the rights to mine perhaps the only iron ore body in North America capable of supporting low cost pellets. This unique deposit contains very coarse grains of iron and silica, a waste material that ends up in slag in the blast furnaces.

Large grain size is key because these coarse grains are easily—and economically—separated, so the resulting pellets contain very little silica. At 1.5-1.6% silica, Essar Steel Minnesota’s pellets compare very favorably to the Iron Range average of about 5% silica. Pellets will be processed onsite into direct reduced iron (DRI), an interim step in the company’s steelmaking process.

Low silica content is necessary because Essar Steel Minnesota will transform DRI into steel in an electric arc furnace (EAF), a low cost steelmaking method that cannot remove large amounts of silica.