Essar Steel Minnesota Raises Financing for Iron Ore Pellet Facility
05/28/2014 - Essar Steel Minnesota LLC (ESML) has successfully closed a US$450 million, 6-year secured notes offering which will be used to fund its integrated iron ore pellet facility.
The proceeds of the notes will be deposited into an escrow account, and upon the completion of certain conditions and documentation, the proceeds of the notes will be released to ESML.
ESML is engaged in the development of a 7-million-metric-ton-per-annum fully-integrated iron ore pellet production facility, with a total investment of US$1.8 billion. The facility’s location in the western Mesabi Range in northern Minnesota, which has a long history of iron ore mining, will allow ESML to leverage the established local infrastructure to complete and operate the facility. ESML has full transportation infrastructure in place and has entered into long-term off-take agreements that, upon commencement, will cover all of the expected production capacity. Based on its NI 43-101 report, ESML has an aggregate of approximately 1.8 billion metric tons of measured and indicated magnetite iron resources and expects to be one of the lowest cost producers of iron ore pellets in North America.
Essar Global Fund Limited (EGFL), the ultimate shareholder of ESML, also owns assets with 14 million metric tons per annum of existing iron ore pellet producting capacity and a further 6 million metric tons per annum of capacity under development. Combined with the capacity being developed in Minnesota, when fully onstream, EGFL’s portfolio companies will operate a total 27 million metric tons of iron ore pellet capacity, one of the largest pellet production capacities globally.
Madhu Vuppuluri, ESML’s president and CEO, commented: “We are delighted to have completed this important financing, which marks a significant milestone for ESML as we move ahead to deliver our 7 million metric tons of pellet production capacity in Minnesota. ESML will be the first new pellet plant constructed in over 35 years in the Mesabi Range, made possible by not only the superior resource base and infrastructure availbale to ESML, but also the skill base and support of the local community.”
ESML is engaged in the development of a 7-million-metric-ton-per-annum fully-integrated iron ore pellet production facility, with a total investment of US$1.8 billion. The facility’s location in the western Mesabi Range in northern Minnesota, which has a long history of iron ore mining, will allow ESML to leverage the established local infrastructure to complete and operate the facility. ESML has full transportation infrastructure in place and has entered into long-term off-take agreements that, upon commencement, will cover all of the expected production capacity. Based on its NI 43-101 report, ESML has an aggregate of approximately 1.8 billion metric tons of measured and indicated magnetite iron resources and expects to be one of the lowest cost producers of iron ore pellets in North America.
Essar Global Fund Limited (EGFL), the ultimate shareholder of ESML, also owns assets with 14 million metric tons per annum of existing iron ore pellet producting capacity and a further 6 million metric tons per annum of capacity under development. Combined with the capacity being developed in Minnesota, when fully onstream, EGFL’s portfolio companies will operate a total 27 million metric tons of iron ore pellet capacity, one of the largest pellet production capacities globally.
Madhu Vuppuluri, ESML’s president and CEO, commented: “We are delighted to have completed this important financing, which marks a significant milestone for ESML as we move ahead to deliver our 7 million metric tons of pellet production capacity in Minnesota. ESML will be the first new pellet plant constructed in over 35 years in the Mesabi Range, made possible by not only the superior resource base and infrastructure availbale to ESML, but also the skill base and support of the local community.”
