Steel Tycoon Sanjeev Gupta on US Acquisition Spree, SC Impacted
Thursday, April 27th, 2017
Britains Indian-origin steel tycoon Sanjeev Gupta has made a bid to acquire all the assets of a Minnesota iron ore firm, days after he announced plans to take over ArcelorMittals steelworks in the US.
GFG Alliance, which includes Guptas global industrial and metals group Liberty House as well as his familys resources and energy group SIMEC, said the move to acquire Mesabi Metallics Company LLC, formerly known as Essar Steel Minnesota LLC and ESML Holding Inc, was part of its plans to step up its North American expansion programme.
The acquisition will cover a seven million tonnes-a-year iron ore pellet plant at Nashwauk Minnesota with an expansion potential to 14 million tonnes a year, plus magnetite resources estimated at 1.968 billion tonnes, with reserves of 1.679 billion tonnes, and hematite mineral resources estimated to be around 352 million tonnes.
The bid is being made as a consortium alongside ERP Iron Ore (ERPI) and institutional investors working together as the Chippewa Capital Partners.
"We are very pleased to team up with our partners in the Chippewa Capital Partners consortium to put forward this exciting proposal. We see this as a time of renewed opportunity for growth of American industry, and we have the breadth and depth of skill and experience to capitalise on that opportunity,? said Gupta, executive chairman of GFG Alliance.
He said the bid to acquire Mesabi Metallics fits with the GFG strategy to develop end-to-end integrated and sustainable businesses in North America, encompassing mining and energy production through to recycling, steel making and engineering, underpinned by the groups financial services operation.
Jay Hambro, GFGs Chief Investment Officer and CEO of SIMEC Mining, said: "With current volatility in the iron ore price, it is important to focus on a low cost operation and on value-added products that have a long-term demand base.
"The Mesabi assets need a well-considered built-out programme under the leadership of a group investing with a view to long-term ownership."
The move follows last weeks announcement that Liberty House has reached an agreement with NRI steel major Lakshmi N Mittals ArcelorMittal to buy the Georgetown steelworks in South Carolina with its electric arc furnace and rod mill.
See more at India Today.