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While recent news about price, demand and employment hasn’t been favorable for Iron Range mining operations, the largest mining construction project here during this century is nonetheless moving ahead, executives say.
Essar Steel Minnesota, a $1.9 billion project located north of Nashwauk on the former Butler mining site, is ramping up for a summer of large-scale activity with the goal of completing construction on the taconite mine by the end of this year. It’s permitted to produce 7 million tons of taconite pellets annually and is expected to operate for approximately 80 years.
Reestablishing mining operations here has been decades in the making. Butler ceased production at the site in the mid-1980s. Later, various would-be developers announced plans to reopen the site to mining. But for years, the plans never made it off the drawing board. That changed in 2007, when India-based Essar purchased what was formerly known as Minnesota Steel Industries.
At a ground breaking for Essar Steel Minnesota in 2008, executives then promised a mining operation that would be up and running within 27 months. Timelines, however, were slowed significantly by the worldwide financial crisis and difficulty obtaining the necessary financing.
The project, executives said, is now back on track. Mitch Brunfelt, Essar’s assistant general counsel and director of government and public relations, said current timelines call for a taconite plant that’s completed the construction phase by the end of this year and will ramp up production in 2016.
“It’s been a fairly long journey,” said Essar Steel Minnesota President and CEO Madhu Vuppuluri. “It was hard for a project of this size to progress. We have done everything we could to get this project to this point. We have a very clear game plan to start production in early 2016.”
In late April, when BusinessNorth toured the site, the company reported there are nearly 400 construction workers on the job. That number is expected to peak at 800 later this year.
Despite the coming idling of nearby Keetac beginning in May and the layoff of about 400 workers, a shutdown of Magnetation’s Keewatin plant impacting about 40 workers and a layoff of about 700 workers at Minntac in Mt. Iron beginning in June, there is some hope in the air about Essar.
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