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Minnesota-based Mesabi Metallics is investing $15 billion to build a planned steel mill in southeast Iowa, along with an additional $3 billion planned to complete construction of an iron ore mine in Minnesota.
The company, part of Indian multinational conglomerate Essar Group, said the planned mill project in Lee County is the largest single investment ever in a U.S. steel facility, with an initial annual output of about 7.5 million tons when it operates in 2030. Iron ore pellets from the Nashwauk mine, north of the Iron Range, would feed steel production in northern Minnesota, the official announced of Essar2.
The plant is expected to produce 10 million tons of steel annually as more capacity is added.
Construction of the Iowa steel complex will create more than 6,000 jobs during construction and use “a world-class steel supply chain that is 100 percent American,” Mesabi Metallics CEO Joe Broking said, but officials have not identified its construction team. Once operational, it will support at least 1,750 workers, the company said.
Mesabi’s investment “will create good-paying jobs with competitive benefits in Iowa and Minnesota, generate tens of billions of dollars in US economic activity and strengthen our domestic manufacturing base,” he added, with products to be used in national defense, vehicles, ships, energy systems and infrastructure.
The Iowa steel complex will use electric arc furnace and hot-reduced iron technologies that Mesabi says will significantly reduce energy consumption and lower emissions. Direct reduction iron technology creates solid metallic iron by removing oxygen at temperatures below its melting point from iron ore.
The mill’s electric arc furnace will be fueled with a mix of newly reduced iron from the reduced iron process directly from the plant and scrap steel to reduce the energy required and emissions compared to traditional blast furnaces, the company said.
The located Mesabi iron ore mine is the first new US iron mine built in 50 years, the company added, intended to produce what it calls Patriot Pellet: a direct reduction iron ore pellet designed for modern electric arc furnace steelmaking.
But the mill’s location in Iowa is a “punch,” the Minn. representative said. Spencer Igo (R) in a Facebook post. “We can’t continue to watch billions of dollars in investment and thousands of high-paying jobs go elsewhere and pretend there’s nothing we can do about it,” he said.
More than 1,500 construction workers are currently based in Minnesota, with about 200 full-time employees already working at the mine, which will grow to 350 full-time jobs once fully operational, the company said.
The mine project was 95.5% complete as of May 31, the SEC reports, with engineering described as 99% complete and construction as 91.4% done.
Broking has said the company would expand the mine’s capacity with an additional facility for hot briquetted iron, a purer form of iron used to supply electric arc furnaces, according to MPR News. It also reported that Broking has told local officials that the company wants more efficient state permitting, more competitive incentives and to regain control of state mineral leases awarded to Cleveland-Cliffs, a rival mining and steel company, according to MPR News.
Essar Steel Minnesota, which had been developing the Minnesota mine, filed for Chapter 11 bankruptcy in 2016 because it was unable to raise enough money to finish construction. The bankruptcy allowed him to preserve and eventually complete the project.
Mesabi Metallics notes on its website that it pays contractors for the 16,000-acre Minnesota mine project a month in advance. The IBEW Local 294 union says on its website that the project is covered by a project labor agreement, which is common, but that advance payment is rare.
Members of the electrical workers union are “handling all aspects of electrical work: power distribution, motor controller installation and commissioning, conduit installation, underground conduit bank installation and lighting,” the union reports. “Members are also responsible for crane installation and commissioning, instrumentation installation and commissioning, design assistance for mining substation construction, and power requirement for site construction.”
