Nashwauk, MN – Citing substantial economic benefits for the state and a significant investment on Minnesota’s Iron Range, Governor Tim Pawlenty participated in groundbreaking activities today for the new $1.65 billion Essar Steel Minnesota project near Nashwauk. The plant will be the first mine-to-steelmaking facility in North America.

“Minnesota’s quality of life depends on our citizens having access to good jobs,” Governor Pawlenty said. “This project is a boost in that direction. At a time when the nation is facing tough economic challenges, Essar’s investment will mean hundreds of full-time and thousands of construction jobs for Minnesota.”

Essar Steel Minnesota is projecting to create 2,000 construction jobs, 700 permanent jobs and more than 2,000 spin-off jobs, according to Iron Range Resources. The project includes a new iron ore pellet plant, direct-reduced iron facility and steel mill designed to produce up to 2.5 million tons of steel products each year.

“Today is an historic day for the Mesabi Iron Range, the state and Essar Steel,” said Iron Range Resources Commissioner Sandy Layman. “This project will generate tremendous economic benefits for our communities, schools, businesses and the state.”

The state of Minnesota is supporting infrastructure development for the project totaling $71.9 million -- $40 million in bonding, an $11 million supplemental appropriation approves in 2006, $14.9 million from the Minnesota 21st Century Minerals Fund and $6 million in Iron Range Resources project development assistance.

“The Essar Steel Minnesota facility will produce new jobs, business and housing across the Iron Range,” said Minnesota Department of Employment and Economic Development Commissioner Dan McElroy. “The positive impact that this steel plant will generate will be felt throughout the state.”

Over the past several years, significant land ownership transactions and a rigorous environmental review and permitting process was required before the project could proceed. The Minnesota Department of Natural Resources and Minnesota Pollution Control Agency worked together to ensure that the citizens of Minnesota had the opportunity to participate in those discussions while also ensuring that the work was completed in a thorough, transparent, and timely manner.

“This project is an example of hard work and coordination among many partners and we’re gratified to see it moving forward,” said Minnesota Department of Natural Resources Commission Mark Holsten. “Essar Steel Minnesota has a solid mining plan in place, as well as good strategies for future land reclamation projects. It is a true asset to the state.”

Located at the site of the former Butler Taconite plant that closed in 1986, the Essar Steel Minnesota plant will use clean-burning natural gas and electricity, and will emit the least amount of mercury per ton of steel produced anywhere in the world.

“Essar Steel Minnesota is an example of a facility that will be implementing state of the art pollution control technologies and processes,” said Minnesota Pollution Control Agency Commissioner Brad Moore. “It is also on the cutting edge of testing even more innovative technologies that could benefit the entire mining industry.”

Since the 2001 closure of LTV Steel Mining Co. in Hoyt Lakes, Minnesota has worked hard to reinvigorate its iron ore industry. These efforts, coupled with a surge in global demand for iron units, have combined to make the industry healthy and vibrant.

Minnesota taconite production hit a 15-year low of 13.6 million tons in 2001. In contrast, the six taconite plants on the Iron Range in 2008 are projected to produce nearly 40 million tons of iron ore pellets. These taconite plants are currently producing at full capacity and many have expansion plans to increase capacity.

Driven by demand for steel in growing economies such as China and India, global demand has dramatically driven up the price of iron ore pellets, which has benefited domestic steelmakers and iron ore producers.

The Essar Steel Minnesota plant is one of about $5 billion in economic development projects either proposed or under construction on the Iron Range.