Grupo Simec’s subsidiary Republic Steel to manufacture pig iron in Ohio

26 July, 2017

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Ohio-based Republic Steel, a subsidiary of Mexico’s Grupo Simec, announced it has signed Memorandum of Understanding to ERP Iron Ore, LLC, relating to the formation of a joint venture to produce pig iron at Republic’s steel mill located in Lorain, Ohio.

Pig iron is the semi-finished metal produced from iron ore in blast furnace, containing 92% iron, high amounts of carbon (typically up to 3.5%), and balance largely manganese and silicone plus small amounts of phosphorus, sulfur, and other impurities.

When fully operational, the Lorain mill is expected to produce up to one million net tons of pig iron per annum. The Joint Venture will serve the increasing demand for virgin iron required to produce steel in the Electric Arc Furnace sector.

The Joint Venture benefits from the existing infrastructure located at Republic’s plant in Lorain, Ohio, including its blast furnaces, and its location along the Black River providing cost-effective shipping to major EAF steel producers. ERP plans to rail iron ore pellets to Lorain from its Reynolds, Indiana plant which was recently constructed at a cost in excess of US$ 400 million.

“We are excited to announce this new venture and look forward to utilizing our assets in Lorain, Ohio to bring back production of pig iron which was previously displaced by foreign imports…” Republic President and CEO Jaime Vigil said in a statement. ERP CEO Tom Clarke added, “We are very excited to partner with Republic in rebuilding a U.S. industry and providing employment in areas economically depressed by foreign imports.”

Republic Steel was acquired in July 2005 by Industrias CH, S.A de C.V. (ICH), a rapidly growing steel producer and processor based in Mexico City. Republic Steel is a subsidiary of Grupo Simec, Guadalajara, Mexico, of which ICH is the majority owner. The company's strategic alliance with ICH is helping strengthen its relationships with customers expanding in Mexico and South America.

ERP Iron Ore, LLC is affiliated with a consortium of mining and industrial assets producing coke, coking coal, and iron ore. ERP affiliates have successfully reopened mining operations throughout North America and are now the second largest producer of coking coal in North America, with run-rate production of 10.6 million metric tons per annum (mmtpa).

ERP acquired the former Magnetation LLC assets with three iron ore beneficiation plants located in and adjacent to Grand Rapids, Minnesota and a state of the art Metso pellet plant in Reynolds, Indiana capable of producing 3.5 mmtpa. ERP affiliates have confirmed a plan of reorganization to invest US$ 250 million of equity capital, to sponsor Mesabi Metallics Company LLC in its reorganization and completion of a 7.0 mmtpa Metso pellet plant in Nashwauk, Minnesota.

The Magnetation and Mesabi assets represent over US$ 2.6 billion of recently invested capital with future capacity to produce 10.5 million mmtpa of the highest quality iron ore pellets.

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