Essar Steel to invest $4b in US expansion

Mumbai: India's Essar Steel Holdings, which acquired Minnesota Steel Industries last year, plans to invest $4 billion to expand its operations in North America.

The Mumbai-based steelmaker plans to invest $1.6 billion to develop an iron-ore mine and set up a steel plant in the region, the company said in an e-mailed statement.

Essar Global, which owns 88 per cent of Essar Steel, agreed to buy Canada's Algoma Steel last year for $1.63 billion to gain access to North American markets and supply the alloy to carmakers such as General Motors.

Indian steelmakers are expanding abroad to secure access to raw materials. The price of iron ore, the main material used in steelmaking, has surged in the past five years, prompting companies including ArcelorMittal to seek greater control over supplies.

Minnesota Steel has 1.4 billion tons of iron ore resources in the Mesabi range, the statement said.

The company's iron-ore reserves are enough for about a century of steel production, based on planned output of 2.5 million tons a year of finished steel, John Elmore, Minnesota Steel's chief executive officer, said last year.