Significant Expansions
In the last year, SDI has made a number of big moves to enhance its capabilities and product offering. Last December, SDI purchased approximately 6,000 acres of land at Hoyt Lakes, Minn., from Cleveland Cliffs Inc. The company also obtained the mineral rights for this property, as well as those for additional land that is next to the purchased parcel. SDI notes these properties are at the site of a taconite mine on the Mesabi Iron Range that was previously operated by the former LTV Corp. and was later purchased by Cleveland Cliffs.

Steel Dynamics says it 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; these operations could begin in late 2009 or early 2010.

SDI says the cost of this venture is estimated to be $165 million.

Separately, SDI 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. The company explains Iron Range Resources and the Minnesota Department of Employment and Economic Development have supported this project, and the state of Minnesota has agreed to provide $26.5 million in non-recourse financing for the nugget project. The plan 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,” it says. “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.”

In June, Steel Dynamics and OmniSource acquired Recycle South LLC, which, SDI says, is one of the largest regional scrap metal recycling companies in the nation and is headquartered in Spartanburg, S.C. OmniSource, which already owned 25 percent of Recycle South, acquired the remaining 75 percent interest for $515 million.

“This transaction significantly expands our recycled metals business platform created by the acquisition of OmniSource in October 2007,” Busse said at the time of the acquisition. “It demonstrates SDI’s strategic commitment to the continued expansion of ferrous and non-ferrous recycling.”