Essar Steel Minnesota LLC (ESML) announced Monday that it has entered into a long term iron ore pellet off-take agreement with ArcelorMittal USA. The term of the agreement is 10 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 tons (mt) of standard and fluxed iron ore pellets annually to ArcelorMittal's North American operations. ESML has approximately 2 billion mt of measured, indicated and inferred magnetite resources, out of which approximately 1.7 billion mt are proven and probable reserves. Furthermore, the company also has about 290 million mt of hematite resources. ESML is presently constructing a 7 million mt per year iron ore pellet plant at Nashwauk in Northern Minnesota, at an investment of US$1.7 billion.