Essar Steel Minnesota inks offtake agreement with ArcelorMittal USA
TORONTO (miningweekly.com) – US-focused iron-ore project developer Essar Steel Minnesota (ESML) has entered into a decade-long iron-ore pellet offtake agreement with ArcelorMittal USA (Amusa), that is expected to start during the second half of ESML's financial year ending March 31, 2014.
Under the agreement, ESML would supply 3.5-million tons of standard and fluxed iron-ore pellets a year to ArcelorMittal's North American operations.
ESML currently has about two-billion tons of measured, indicated and inferred magnetite resources, out of which about 1.7-billion tons are proven and probable reserves. The company also has about 290-million tons of hematite resources.
ESML, a private company, is currently constructing a $1.7-billion iron-ore pellet plant, which would have a capacity of seven-million tons a year at Nashwauk, in Northern Minnesota.
"This offtake agreement demonstrates the marketability of ESML's high-quality products to third parties, in addition to Essar Steel Algoma,” CEO Madhu Vuppuluri said in a statement.
He added that ESML's product portfolio would include standard, flux and direct-reduced grade pellets, and ESML would be the only producer capable of producing all three types of pellets in US.
"This offtake agreement is consistent with our strategy of securing long-term supply of critical raw materials within the region, and it provides material that meets the stringent standards of our blast furnaces. ESML's ability to provide different types of pellets provides us the flexibility to utilise the product at multiple furnaces,” ArcelorMittal USA executive VP for finance, planning and procurement John Brett said.
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