Posted on 07 Jan 2016
It was a “very, very active year” at Essar Steel Minnesota’s taconite plant project site, with “significant construction progress,” according to company President and CEO Madhu Vuppuluri.
It was also a very, very controversial year for the Nashwauk initiative, which had highs ranging from more than 700 workers on the construction site and procurement of capital equipment to lows of payment to vendors not being met and most construction halted.
But the Essar 2015 story of peaks and valleys ended with a positive plateau that carries hope for a good 2016 for the project: The company on New Year’s Eve agreed to, and signed off on, an end-of-the-year deadline set by Gov. Mark Dayton for repayment of $65.9 million in infrastructure grants to Itasca County that are Essar’s responsibility.
Both Dayton and Essar officials said resolving the issue portends well for the project:
“This project is tremendously important to the Iron Range, supporting more than 700 construction jobs and an expected 350 permanent jobs once the plant opens,” said the governor, adding that the agreement “is an important step to move this project forward.”
Essar spokesman Mitch Brunfelt agreed.
“With this issue resolved, Essar will continue to focus its efforts on keeping payments flowing to our contractors and vendors and on moving forward again with this historic project.”
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The Essar Minnesota Nashwauk initiative is like a child to Vuppuluri since 2008 when ground was broken at the former Butler plant site for what was initially planned to host a steelmaking facility along with the taconite plant.
The project, now seven years old, has been a petulant one. The starts and stops have tested the patience of supporters, while giving fertile ground for criticism to it detractors.
But Vuppuluri prefers to proudly point to its achievements already benefitting the Iron Range and the potential for much more.
In a telephone interview last week from India, where he was on New Year’s trip seeking more investment for the Essar venture, the president and CEO assessed the past year.
“Enormous progress was made. We had great construction the past 12 months.
“We had challenges, yes, but I am confident the pact of construction will ramp up fast and fairly quickly in the next few weeks toward production in 2016,” Vuppuluri said.
He said the enormity of the $1.9 billion all brand-spanking new greenfield project left itself vulnerable to financial stumbles.
“With the magnitude of the project, sometimes issues will crop up. There’s also been a lot of distraction ... that’s part of life and projects,” Vuppuluri said.
Essar officials cite some big financial gains for the Iron Range and state:
? $350 million in new spending that will annually be generated in the region.
? More than 2.2 million construction hours already put in through October 2014.
? $180 million in new tax revenues each year for the state.
? 350 permanent jobs once the plant is in production; hundreds of additional indirect jobs.
“We have a lot of satisfaction of what we have accomplished. Looking at where the industry is today, I can’t imagine a taconite project of this size happening in North America again in a lifetime, if ever.
“It will be a time for celebration to see history being created on the Mesabi Range,” Vuppuluri said.
