| FORT WAYNE, INDIANA, September 20, 2007 — Steel Dynamics, Inc.
(NASDAQ: STLD) announced that it is moving forward with the Mesabi
Nugget iron-making project at Hoyt Lakes, Minnesota, and that the State
of Minnesota is participating in the project’s financing. This plant
will be the world’s first commercial iron-making facility to use the
ITmk3® process, an iron-nugget production technology pioneered by Kobe
Steel, Ltd., which Kobe Steel is licensing to the venture. Subject to
completion of final project financing arrangements, Steel Dynamics
intends to invest $85 million in equity in the venture and to hold an
81% equity interest, while Kobe Steel plans to invest $20 million in
equity for a minority equity stake of 19%.
Minnesota Governor Tim Pawlenty today announced that the state has
approved $26.5 million in non-recourse financing for the project.
Earlier, Iron Range Resources (IRR) and the Minnesota Department of
Employment and Economic Development (DEED) (state economic development
agencies) had announced their support for the project.
The project will involve the construction of a $235 million
iron-nugget manufacturing facility utilizing iron-ore concentrate, coal,
and natural gas. Annual iron-nugget production capacity is expected to
be 500,000 metric tons. Although preliminary construction activity has
begun at the Hoyt Lakes site, full construction of the iron-making
operation is not expected to commence until later this year, following
the completion of financing and satisfactory resolution of permitting
issues.
Steel Dynamics anticipates that substantially all of the iron output
from the planned nugget plant will be consumed in SDI’s mini-mills. The
company believes that this new business will be capable, at a favorable
cost, of providing to its steel mills 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.
Steel Dynamics also announced that its board of directors has
approved an additional initiative related to the Mesabi Nugget facility
which is currently in the planning phase. The company plans to develop
an existing iron mine on the Mesabi Iron Range and to construct a
facility for concentrating iron ore. The company intends to purchase or
lease land on the Mesabi Iron Range in Minnesota that is expected to
provide a long-term supply of iron ore. In the future, the company plans
to process the iron ore and use it as raw material feedstock for the
nugget plant. In total, the cost of this venture is estimated to be $165
million. Operations could begin in late 2009 or early 2010, assuming
the timely issuance of permits. The company expects to fund
approximately $65 million in equity related to this project and will be
the sole owner.
Forward Looking Statements
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