This item is cross-posted with my Up North Report blog at StarTribune.com.
The Star Tribune’s Dee Depass reports that Essar Steel has secured $450 million in new private financing, and is injecting $300 million of its own money into finishing its long-awaited Nashwauk taconite plant.
Here on the ground north of Nashwauk, the project has been a source of local hopes, fears and loathing. The odd start-and-stop nature of Essar’s construction plans has periodically left contractors in the lurch and townsfolk wondering if the project was *really* going to happen, even with a massive concrete spire visible for miles around.
The issue: financing. India-based Essar has figurative and often literal irons in the fire all over the world. They’ve cited slow availability of loans as the reason for the unusual delays and erratic construction pace.
There are more questions ahead. As this section from the story shows, the original goal for this project — making steel on the Iron Range — has pretty much slipped away.
The financing problems associated with the taconite factory have tempered expectations that Essar eventually would create a three-pronged steel production facility. Back in 2008, Essar unveiled a plan for a fully-integrated operation that would mine iron ore, reduce it into iron pellets and use special furnaces to produce finished steel slabs, all on the same site.
If the larger game plan comes to fruition, the operation would be the first to do so in Minnesota, state officials said.
Many of the company’s Iron Range and state grants were predicated on the idea that this would be a value-added iron mining project. If that doesn’t happen, there could be financial repercussions.
Still, after a winter of discontent, the fact that this project is moving ahead is a welcome positive development. As with all mining projects, the market will dictate much about what actually transpires.