Building facilities, building a work force, building a mine – by Anna Kurth (Hibbing Daily Tribune – July 30, 2013)

Essar Steel Minnesota’s place in iron industry secure

NASHWAUK — For officials at Essar Steel, mining in Minnesota is all about location. Locating on the Iron Range provides immediate access to the rail lines and utilities necessary to mine and transport their product and employees with the skills they’re seeking.

Building a new plant also provides the advantage of mining next door to the facility, which allows Essar Steel to be in the first-quartile of low-cost producers, said Ken Kinsey, chief of operations. A large portion of mining costs come from mining operations — equipment and employees, he said. Essar Steel will start operations needing less of both.

Other mines first built their primary crusher right on the doorstep of the mine. But during decades of mining, operations have migrated and haul distances have increased. Now Essar will benefit from mining on its crusher’s doorstep.

“We’ve put our plant on the north side of the ore body so it doesn’t encumber any iron ore resources,” Kinsey said, adding that the plant is positioned so mining will start where stripping is lowest.

The first 15 to 20 years of the mine plan has a very low stripping ratio, he said.

Where competition typically operates more than 20 haul trucks, Essar Steel will operate five haul trucks at full production and still haul a similar tonnage.

Essar’s location on the west end of the Mesabi Range also gives it the advantage of softer ore, which requires less energy to grind than mines to the east, Kinsey said.

“We’re very well placed to be in that top quartile of low cost producers as you would expect with a new project,” said Kevin Kangas, director of health, safety, environmental and government affairs.

This is important in starting a new mining operation because the project is a $1.7 billion dollar investment that will need to be recouped.

As far as Essar Steel officials have seen, it’s the largest private project being developed in North America — if not the world — today, Kangas said.

“Although it’s also an important project to the state, not even the new Vikings stadium (is this big),” he joked.
Officials are continuing to work on financing for the investment. About $810 million has been spent on engineering, procurement, construction and land purchases to date.

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