To invest USD 1.6 billion in setting up North America's first mine-based steel plant
	Single largest investment in the Mesabi range in recent times
	Essar Steel Minnesota has resources totalling 1.4 billion tonnes of high quality iron ore in the Mesabi range
	Project will include iron ore mining and production, concentration plant, pellet plant, DRI plant and steel making facilities
	Minnesota Steel renamed to Essar Steel Minnesota, LLC

September 19, 2008, Nashwauk, Minnesota: Essar Steel Holdings Ltd, a part of Essar Group, today held a groundbreaking ceremony for the first steelmaking facility in Minnesota's famous Iron Range.

The USD 1.6 billion facility will be North America's first mine-based steel plant and the single largest investment made in the Mesabi range in recent times.

The ceremony also marked the unveiling of Essar Steel Minnesota, LLC, the new name for the steelmaking project that was earlier known as Minnesota Steel.

ln 2007, Essar Steel Holdings acquired Minnesota Steel, which has more than 1.4 billion tonnes of iron ore resources in the Mesabi range.

Essar Group Chairman Shashi Ruia said, "We are excited about starting this project. Today's groundbreaking is another step towards our goal of building a large presence in the steel sector in the Americas. We thank Governor Pawlenty and the local administration for lending their support to our Iron Range project. Essar remains committed to North America with investments of over USD 4 billion in the region and currently employs more than 8,000 people here."

State and local officials, including Minnesota Governor Tim Pawlenty, joined senior officials from the Essar Group to break ground at the site near Nashwauk.

Minnesota Senator Tom Saxhaug remarked on the merit of the project, "Essar Steel Minnesota is an excellent example of the kind of economic development we want and need on the Iron Range. The project not only will mine iron ore, it also will make steel-generating value-added benefits and creating high-tech jobs for our people. This is an example of how various institutions and hard-working people can get together to do a project that some thought was impossible."

The Honorable Bill Hendricks, Mayor of Nashwauk added, "Everybody in Nashwauk is so excited that this day has finally come. We know that it is a historic event and we couldn't be happier. We realize that this project will be a huge boost to the economy for NE Minnesota. We look forward to this joyous day of celebration."

Besides iron ore mining and production, the project will include a concentration plant, a pellet plant, a Direct-Reduced Iron (DRI) plant and steelmaking facilities. At full production Essar Steel Minnesota will employ nearly 500 people, and up to 2,000 construction workers over the course of the project. Iron ore pellets will be produced within about two years from the start of construction. Production of DRI pellets and steel slabs is expected to begin the fifth and the sixth year onwards, respectively.

Speaking on the occasion, Madhu S Vuppuluri, President and CEO of Essar Minnesota Steel, LLC, said: "We are delighted to start this mine based project in the prolific Mesabi range, which is one of the largest sources of high quality iron ore for US steelmakers. This is integral to our strategy to become an efficient global steelmaking company."

The production from this facility will also support the Essar Steel Algoma plant in Sault Ste Marie, Ontario, Canada. Essar acquired the Algoma plant in 2007 and has committed a capex of USD 500 million in the next five years. Following the acquisition, Essar Steel Algoma increased its capacity from 2.4 MTPA to 4 MTPA in less than a year. The synergies between the Minnesota and Algoma facilities will strengthen Essar's presence as an integrated steelmaker, with high value-added products, in the North American market.

The Iron Range project will be located at the site of the former Butler Taconite operation.

About Essar Group
Essar Group is a diversified business corporation with a balanced portfolio of assets straddling the manufacturing and services sectors of Steel, Energy, Power, Communications, Shipping Ports & Logistics, Construction and Mining & Minerals. Essar has a firm value of approximately USD 50 billion and employs more than 40,000 people across offices in Asia, Africa, Europe and the Americas.

Note to Editors

Essar Steel Holdings Ltd is a global producer of steel with a footprint covering India, Canada, USA, the Middle East and Asia. It is a fully integrated flat carbon steel manufacturer-from iron ore to ready-to-market products. Essar Steel has a current capacity of 9 million tonnes per annum (MTPA). With its aggressive expansion plans in India as well as Asia and the Americas, its capacity will go up to 20 to 25 MTPA. Its products find wide acceptance in highly discerning consumer sectors, such as automotive, white goods, construction, engineering and shipbuilding.

ln 2007, Essar Steel acquired Algoma Steel in Canada, which has a capacity of 4 MTPA, and Minnesota Steel, which controls iron ore resources of over 1.4 billion tonnes. The company is building a steel plant in Minnesota. ln Indonesia, it operates a 400,000 TPA cold rolling complex with a galvanizing line of 150,000 TPA, making it the largest private steel company in that country. Additionally, Essar is setting up a 2 MTPA hot strip mill in Vietnam and a 2.5 MTPA integrated steel plant in Trinidad & Tobago.

Essar Steel is the largest steel producer in western India, with a current capacity of 4.6 MTPA at Hazira, Gujarat, and plans to increase this to 10 MTPA. The Indian operations also include an 8 MTPA beneficiation plant at Bailadilla, Chattisgarh, and an 8 MTPA pellet complex at Visakhapatnam. Additionally, Essar is setting up a 6 MTPA integrated steel plant in Paradip, Orissa.

The Essar Steel complex at Hazira in Gujarat, India, houses the world's largest gas-based single location sponge iron plant, with a capacity of 5.5 MTPA. The complex also houses the steel plant and the 1.4 MTPA cold rolling mill. The steel complex has a complete infrastructure setup, including a captive port, lime plant and oxygen plant.

For more information, contact:
India
Sharad Goel, Group Head - Media Relations, Essar Group, at: +91 22 6660 1858, sharad.goel@essar.com
B Ganesh Pai, General Manager- Corporate Communications, Essar Group, at +91 98197 30225, ganesh.pai@essar.com
Parikshit Kaul, Dy. General Manager, Corporate Communications, Essar Group, at +91 98735 70816, pkaul@essar.com
Canada
Brenda Stenta, Manager, Corporate Communications, Essar Steel Algoma, at +1 705945 2209, bstenta@algoma.com
United Kingdom
William Clutterbuck, Maitland, at +44 20 7379 5151, wclutterbuck@maitland.co.uk