Contract Award Probably Spells the End for Essar Steel Minnesota Project
06/13/2016 - ArcelorMittal’s new long-term pellet supply agreement with iron ore miner Cliffs Natural Resources is likely the "final nail in the coffin" for the Essar Steel Minnesota taconite project, says a columnist for the Minneapolis Star Tribune.
“At this point it really doesn’t matter if Essar Steel Minnesota somehow succeeds in reworking its finances and gets construction moving again, as there isn’t an obvious customer for any production,” writes columnist Lee Schafer.
The billion-dollar Essar project was to have been the first greenfield mining operation on Minnesota’s Iron Range in years. It was to have opened this year, but stalled in December after running out of funding.
The facility sits unfinished, and as the Duluth News Tribune reported, Essar is continuing to look for equity partners, is said to be considering bankruptcy protection, and is past-due on more than US$60 million owed the state of Minnesota.
And now it appears that the facility doesn't have anyone to sell its pellets to.
In May, Cliffs announced that it had signed a 10-year agreement with ArcleorMittal to supply up to 10 million tons annually of pellets. The agreement is helping clear the way for Cliffs to restart its United Taconite facility, which was idled last year.
According to the News Tribune, investors who hold the delinquent bonds on the Essar project are working with area officials and businesses to see if the project can be salvaged, with or without Essar's involvement.
Meanwhile, an unrelated iron ore project in Canada gained a bit of momentum last week, with the developer releasing a preliminary feasibility study showing that the project could be financially viable.
New Millennium Iron Corp. has yet to decided whether to advance its so-called NuTac project, but said the study concluded
that the project's output could compete on cost and quality and would be suitable for both blast furnaces and the direct reduction process.
The project area sits on seven taconite-bearing properties in Canada's Millennium Iron Range, which straddles the provinces of Quebec and Newfoundland and Labrador. The project area contains 815 million metric tons of proved and probable reserves, according to the feasibility study.
New Millennium president and chief executive Robert Patzelt said the company is pleased with the study's outcome.
"It shows a solid project outcome targeting the high-quality segment of the iron ore market, based on the established resource identification and processing technology we have available from earlier studies, along with balanced assumptions," he said.
"The NuTac initiative has thus achieved our objective of using this transferable know-how to re-scope and re-engineer (New Millennium's) principal asset -- the taconite properties -- into a project concept that improves the potential for market entry in response to new industry developments."
The billion-dollar Essar project was to have been the first greenfield mining operation on Minnesota’s Iron Range in years. It was to have opened this year, but stalled in December after running out of funding.
The facility sits unfinished, and as the Duluth News Tribune reported, Essar is continuing to look for equity partners, is said to be considering bankruptcy protection, and is past-due on more than US$60 million owed the state of Minnesota.
And now it appears that the facility doesn't have anyone to sell its pellets to.
In May, Cliffs announced that it had signed a 10-year agreement with ArcleorMittal to supply up to 10 million tons annually of pellets. The agreement is helping clear the way for Cliffs to restart its United Taconite facility, which was idled last year.
According to the News Tribune, investors who hold the delinquent bonds on the Essar project are working with area officials and businesses to see if the project can be salvaged, with or without Essar's involvement.
Meanwhile, an unrelated iron ore project in Canada gained a bit of momentum last week, with the developer releasing a preliminary feasibility study showing that the project could be financially viable.
New Millennium Iron Corp. has yet to decided whether to advance its so-called NuTac project, but said the study concluded
that the project's output could compete on cost and quality and would be suitable for both blast furnaces and the direct reduction process.
The project area sits on seven taconite-bearing properties in Canada's Millennium Iron Range, which straddles the provinces of Quebec and Newfoundland and Labrador. The project area contains 815 million metric tons of proved and probable reserves, according to the feasibility study.
New Millennium president and chief executive Robert Patzelt said the company is pleased with the study's outcome.
"It shows a solid project outcome targeting the high-quality segment of the iron ore market, based on the established resource identification and processing technology we have available from earlier studies, along with balanced assumptions," he said.
"The NuTac initiative has thus achieved our objective of using this transferable know-how to re-scope and re-engineer (New Millennium's) principal asset -- the taconite properties -- into a project concept that improves the potential for market entry in response to new industry developments."
