FORT WAYNE, INDIANA, December 3, 2007 — Steel Dynamics, Inc.
(NASDAQ-GS:STLD) announced today that it has completed a transaction in
which it has purchased approximately 6,000 acres of land at Hoyt Lakes,
Minnesota, from Cleveland Cliffs, Inc. Steel Dynamics also has obtained
the mineral rights for this property as well as mineral rights on
additional land that is contiguous to the purchased parcel. These
properties are at the site of a taconite mine on the Mesabi Iron Range
that was previously operated by the former LTV Corporation and was later
purchased by Cleveland Cliffs.
Steel Dynamics plans to re-open the mine, to conduct surface mining
of iron deposits, and to construct and operate a facility for the
concentrating of iron ore. Operations could begin in late 2009 or early
2010, assuming the timely issuance of permits. In total, the cost of
this venture is estimated to be $165 million. The company expects to
hold approximately $65 million in equity and will be the sole owner of
the mining and concentrating company, to be known as Mesabi Mining, LLC.
Separately, Steel Dynamics, Inc. and Kobe Steel, Ltd. have formed a
new corporation, Mesabi Nugget Delaware, LLC, to construct and operate
an iron nugget manufacturing plant on the site. Permits have been issued
for the construction and operation of this iron-making facility and
construction is now underway. As previously announced, Iron Range
Resources and the Minnesota Department of Employment and Economic
Development have supported this project, with the State of Minnesota
agreeing to provide $26.5 million in non-recourse financing for the
nugget project. The plant is expected to have an annual capacity of
500,000 metric tons and to begin iron nugget production in mid-2009.
Steel Dynamics anticipates that all of the iron mined from the site
will be concentrated on site and delivered to the nugget plant or to
future additional plants on the site. Substantially all of the output
from the announced nugget plant is expected to be consumed in SDI’s
mini-mills, primarily in Indiana. The company believes that this new
business will be capable of providing to its steel mills, at a favorable
cost, a domestic source of iron units that are of equal or higher
quality than purchased pig iron. In time, additional nugget production
facilities could be constructed at the site.
Forward Looking Statements
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