Minnesota Public Radio's Bob Kelleher reports: The purchaser is a subsidiary of Mombai-based Essar Global Ltd. Minnesota Steel Industries, or MSI, is intended to be northeast Minnesota's first ore-to-steel operation, to be built near the Iron Range town of Nashwauk.
It's a $1.6 billion project that will create 700 full-time jobs, 2,000 construction jobs, and an estimated 2,100 jobs in spinoff and support industries.
MSI President John Elmore says the acquisition by Essar Steel Holdings provides both the capital and expertise to make the project happen.
"It's extremely positive and very, very exciting for us, obviously, as we take this forward," says Elmore.
Essar Global's interests range from oil and gas to communications and shipping. Elmore says Essar has experience in the iron and steel-making technologies MSI intends to use, including direct reduced iron, or DRI, and the electric arc steel furnace.
"They bring very strong technical knowledge, and they built and operate plants of this scale and magnitude in India and other places in the world," says Elmore.
Essar Steel Holdings announced Sunday that it was buying a majority stake in Canadian steel producer Algoma Steel. Elmore says the two acquisitions combined make Essar a significant player in the North American market.
"This allows them to have a fantastic footprint in North America, and will kind of be their anchor along with Algoma Steel, which is just across the way in Canada over by Sault Ste. Marie," Elmore says.
MSI began nine years ago as Minnesota Iron and Steel. The current owners purchased the company in 2004 and renamed it Minnesota Steel Industries.
Since then it's been plodding along, often overshadowed by more controversial Iron Range projects like a coal gasification power plant and a sulfide based minerals mine.
Elmore says the $1 billion-plus steel plant had its detractors.
"I know there's been a lot of naysayers out there. But clearly they didn't understand and couldn't see what was really happening strategically, and how this whole landscape has been changed," says Elmore. "This is extremely positive for us, and just again validates everything we've been talking about and what we're doing. And if you do it right, then you'll bring an interest from people that -- let's say most people wouldn't have expected or anticipated this."
Tony Barrett, an economist at the College of St. Scholastica in Duluth, monitors the region's iron industry. He says he was always a little skeptical about Minnesota Steel's chances, until now.
"With Minnesota Steel by itself, the learning curve was going to be very steep. And not just the technology, but the financial side of it, the management side of it, the labor side of it -- everything they were going to have to learn as they built this stand-alone steel mill," says Barrett. "Now that it's part of a global steel company, there's a lot more expertise, there's going to be a shorter learning curve, and this whole project becomes more feasible."
Barrett says he's not surprised to learn the buyer is based in India.
"Not any more. Given our trade deficit, U.S. firms are being sold more and more often to foreign companies," says Barrett. "Indian steel companies have been on a buying spree around the world -- not just of other steel companies, but of other commodity companies. This is just another one on that list, and not even that all that big one. One-point-six billion, that's not big by global standards any more."
Minnesota Steel is now working on its regulatory and environmental permitting. A comment period just ended on the project's draft environmental impact statement.
Permits are expected this summer, and construction should be underway this fall. The plant is to be built in phases, with the first phase online in 2009, producing up to 1.5 million tons of thick steel slab per year.