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MILWAUKEE AREA BUSINESS ONE OF MANY BEING STIFFED BY MINNESOTA TACONITE MINE DEVELOPER
http://stellareport.blogspot.com/Essar Steel Project in Nashwauk Minnesota on Hold
Several Unpaid Contractors Have Left the Project
This is the same project that promised well over 2000 construction jobs but only delivered a couple hundred, and promised 700 full time mining jobs but now they say there will be 300. They were to have started mining already, but now give no definite startup date. Local school districts put off consolidation efforts in reliance on the promises made, and now suffer financial hardship and continued enrollment declines. Some businesses borrowed to hold on for the mine but can no longer stay above water.
I blogged several times last year about this Minnesota venture, which is the same size and has the same cost as the GTAC venture in Wisconsin. Unlike the GTAC proposal, the ESSAR project is in an area with an already-in-tact mining infrastructure. There is no local opposition. It is in an area where the ore is closer to the surface than GTAC's. Essar already even has contracts to sell its taconite pellets. And they used steel from their own plants in India to save over $10 million on construction costs. Yet they still can't complete financing on a project that's already used up over $1.1 Billion. That's because there is no profit to be had in today's market.
Cliff's Natural Resources recently abandoned a huge iron mining project in Canada after already spending $5 Billion. China is shutting down several hundred iron mines. There will be over 200 million tons per year of excess capacity in the iron ore industry by 2015, and it can be produced at less than half the cost in Australia, Brazil, Africa and other places outside the U.S. The fact that Essar saved money shipping steel all the way from India to the Iron Range of Minnesota should say something about the competitive forces in the iron and steel industries.
I blogged several times last year about this Minnesota venture, which is the same size and has the same cost as the GTAC venture in Wisconsin. Unlike the GTAC proposal, the ESSAR project is in an area with an already-in-tact mining infrastructure. There is no local opposition. It is in an area where the ore is closer to the surface than GTAC's. Essar already even has contracts to sell its taconite pellets. And they used steel from their own plants in India to save over $10 million on construction costs. Yet they still can't complete financing on a project that's already used up over $1.1 Billion. That's because there is no profit to be had in today's market.
Cliff's Natural Resources recently abandoned a huge iron mining project in Canada after already spending $5 Billion. China is shutting down several hundred iron mines. There will be over 200 million tons per year of excess capacity in the iron ore industry by 2015, and it can be produced at less than half the cost in Australia, Brazil, Africa and other places outside the U.S. The fact that Essar saved money shipping steel all the way from India to the Iron Range of Minnesota should say something about the competitive forces in the iron and steel industries.
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