New Delhi: Essar Steel Minnesota LLC has entered into a long term iron ore pellet off-take agreement with ArcelorMittal USA ("AMUSA"). The term of the agreement is ten years and the supply of pellets is expected to commence during the second half of ESML's fiscal year ending March 31, 2014.
As per the agreement, ESML will supply 3.5 million metric tonnes of standard and fluxed iron ore pellets annually to ArcelorMittal's North American operations.
ESML has approximately 2.0 billion metric tonnes of measured, indicated and inferred magnetite resources, out of which approximately 1.7 billion metric tonnes are proven and probable reserves. Furthermore, the Company also has about 290 million metric tonnes of hematite resources. ESML is presently constructing a 7.0 million metric tonnes per annum iron ore pellet plant at Nashwauk in Northern Minnesota, at an investment of US$ 1.7 billion.
Madhu Vuppuluri, President and Chief Executive Officer of ESML said: "This off-take agreement demonstrates the marketability of ESML's high quality products to third parties in addition to Essar Steel Algoma." He further added that ESML's diverse product portfolio will include standard, flux and DR grade pellets, and ESML will be the only producer capable of producing all three types of pellets in Unites States.
John Brett, Executive Vice President for Finance, Planning and Procurement of ArcelorMittal, USA, said: "We are pleased to enter into this long term off take agreement with ESML. This off-take agreement is consistent with our strategy of securing long term supply of critical raw materials within the region, and it provides material that meets the stringent standards of our blast furnaces. ESML's ability to provide different types of pellets provides us the flexibility to utilize the product at multiple furnaces. "
About Essar Steel Minnesota Essar Steel Minnesota LLC is a private resources company engaged in the development and mining of iron ore. ESML's iron ore operations are located in the western end of the Mesabi Iron Range in Minnesota, strategically close to critical infrastructure, including rail, port, and surface connectivity systems.