Essar, Keetac get help from Iron Range Resources

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EVELETH — The Iron Range Resources board on Monday extended the terms of a loan to Essar Steel that exempts the company from interest payments into 2010.

The move continues to push back interest payments on $6 million in IRR loans to the company that is building a steelmaking plant near Nashwauk on the Iron Range.

The move saves the company about $180,000. But IRR board members also demanded that Essar cover the interest with a letter of credit or pay the interest for 2020.

The loan has been interest free since 2006.

Several lawmakers said they had hoped to see more progress toward construction at Essar, where millions of dollars in public improvements already have been or are being made to roads, railways, gas lines and more.

“I just need to feel a little more comfort that the private investment is being made,’’ said Rep. Tom Anzelc, DFL-Balsam.

Narasimhan Ramakrishnan, Essar director of finance, said the company has invested $115 million to date, including $85 million to acquire the former Minnesota Steel holdings at the site and about $30 million to develop the site. He said construction would begin in earnest in summer 2010 and production could begin as early as late 2011.

The Essar facility would cost about $1.6 billion and employ nearly 500 people. Essar hopes to turn Minnesota taconite directly into slab steel that can be used in electric arc steel furnaces that are an increasingly larger share of the steel market. Taconite has traditionally gone to larger blast furnaces to be made into steel.

Keetac gets tax rebate

In other action the IRR board approved a $1.72 million rebate of taconite taxes paid by U.S. Steel’s Keetac plant in Keewatin based on production in 2008.

The company will match the rebate with $371,000 of its own money to conduct exploratory drilling for a proposed expansion and to help control dust and reclaim the plant’s tailings basin. The Keetac plant is closed but expects to restart production early in 2010.

New Range medical collaborative forms

The IRR board also approved a $215,000 grant to the newly formed Range Cities Health Care Collaborative between Virginia Regional Medical Center, Grand Itasca Clinic and Hospital in Grand Rapids and Range Regional Health Services in Hibbing.

The collaborative will match the grant with another $215,000. The group hopes to coordinate efforts to better provide medical services across the Iron Range.

Tags: iron range, grand rapids, news, taconite, business, steel, eveleth, nashwauk, health, virginia