Minnesota Gov. Tim Pawlenty said today that construction of a $1.6 billion steelmaking plant on the Iron Range looks promising.
"It's a very exciting proposal and an exciting project,'' said Pawlenty in a conference call from Bangalore, India, where he and 73 other state political and business leaders are on a 10-day trade mission. "There's been a lot of exciting projects proposed on the Iron Range that haven't come to fruition, but this one has a chance to come to fruition.''
Essar Steel, an India-based global steelmaker with oil, gas and communications holdings, on Monday finalized a deal to buy Minnesota Steel's $1.6 billion steelmaking project proposed near Nashwauk.
The plant would employ 700, produce 2.5 million tons of steel slabs per year, and have a $600 mil-lion annual estimated economic impact on the region and state.
Pawlenty on Thursday will meet with Essar Steel and tours an Essar steel mill in Hazira, India.
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Pawlenty said Essar still needs to finance the mammoth project, but said the project "looks very promising.''
"The involvement of Essar increase the chances of it actually happening,'' Pawlenty said. "It's a project I support.''
Itasca County officials during the 2008 legislative session will seek $45 million to $60 million from a projected $1 billion state bonding bill to help develop roads and railroad lines to the project.
"It's important to remember that this bonding money is not going to Minnesota Steel, it's going to Itasca County and the city of Nashwauk,'' said Sen. Tom Saxhaug, DFL-Grand Rapids. "Itasca County is one of the poorest counties in the state and Nashwauk is no thriving metropolis. They need the cash flow to get the infrastructure up to snuff so the project can be built.''
Because of the plant's economic effect and the taxes it would generate, the state would recover its bonding money within five years, Saxhaug said.
Environmental permits for the project have been approved.
Pawlenty said the state would support infrastructure requests.
"We do anticipate supporting finding requests for the project,'' Pawlenty said.
