Officials break ground on first Iron Range steel mill

Gov. Tim Pawlenty hailed Friday's groundbreaking for a slab steel mill northwest of Nashwauk as a momentous event not just for the Iron Range but for the whole state.

Madhu Vuppuluri, CEO and president of Essar Steel Minnesota LLC, cracks a coconut at the site where a new mine and steel slab mill will be built northwest of Nashwauk. Essar is based in India, where tradition holds that it is good luck to split a coconut when embarking on a large project. PETER PASSI/NEWS TRIBUNE

Gov. Tim Pawlenty hailed Friday's groundbreaking for a slab steel mill northwest of Nashwauk as a momentous event not just for the Iron Range but for the whole state.

He noted that the mill -- for the first time ever -- will enable Minnesota to transform taconite pellets into higher-value steel slabs. Pawlenty called the project "a tremendous value-added opportunity" for the state.

Essar Steel Holdings, a global company based in India, plans to invest $1.6 billion to develop a mine, a concentration plant, a pellet plant, a direct-reduction facility and a steel mill on site. The operation will be called Essar Steel Minnesota LLC.

"We here from Essar are privileged to be part of this history-making day on the Iron Range," said Madhu S. Vuppuluri, president and CEO of Essar Steel Minnesota.

Pawlenty observed that despite recent economic trials in the national and regional levels, plans for major mining developments on the Iron Range continue to march forward. He said the prospective combined value of these projects -- including not only the slab steel mill, but iron nugget and copper-nickel-precious metal operations as well -- approaches $5 billion.


"This is a bright spot for the state, and we want to pursue these opportunities with vigor," the governor said.

Given Essar's roots, Friday's groundbreaking had a decidedly international flavor. Strains of Indian music interspersed with patriotic American songs such as "Stars and Stripes Forever" drifted over the throngs of local residents and dignitaries assembled for the event.

What's more, the groundbreaking involved a ceremonial cracking of coconuts, in addition to the American ritual of dignitaries ineffectually wielding golden shovels on the site. Indian tradition holds that splitting open a coconut brings good luck to a project.

Nashwauk Mayor Bill Hendricks said the project has been full of emotional highs and lows. Plans for the mill have been 12 years in the making, and delays prior to Essar's involvement were plentiful.

"Over time, people tend to lose confidence that there is ever going to be a project. Even I, myself, wondered if it was going to happen at certain times. But people stuck to the grindstone," said Hendricks.

Hendricks concluded his remarks Friday with a call to tackle the next immediate task at hand: "We've got a steel mill to build. So, let's get her done."

The plant's construction should commence in the next couple of weeks, and Sen. Tom Saxhaug, DFL-Grand Rapids, expects the physical activity will silence most naysayers. But, he said, "until they actually see it on the ground, some people are going to remain skeptical. We've had to make a lot of people into believers."

Pawlenty credited the project's staunch supporters for making it a reality.


"The reason we are here today is because a group of leaders had a passion and commitment to this project, and they never quit," he said, adding: "I'm sincerely thankful. This would not have happened without a team effort."

The project's taconite plant could be completed and ready for operation within two years, but the slab mill could take five or six years to launch. The plant could produce up to 2.5 million tons of steel annually.

Peter Passi covers city government for the Duluth News Tribune. He joined the paper in April 2000, initially as a business reporter but has worked a number of beats through the years.
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