Minnesota Power Completes New Transmission Line to Energize Essar Steel Minnesota Facility in Nashwauk

  Minnesota Power Completes New Transmission Line to Energize Essar Steel
  Minnesota Facility in Nashwauk

Business Wire

DULUTH, Minn. -- April 02, 2013

Minnesota Power, a division of ALLETE, Inc. (NYSE: ALE), has completed the
installation of several related electric infrastructure projects including
substations and new transmission lines near Nashwauk, Minn., that will
energize the Essar Steel Minnesota taconite mine and processing facility.

Minnesota Power and its contractors worked for two years to construct and
install the $35 million in transmission assets needed to satisfy the large
power demands of Essar, which is constructing a mine, concentrator and
taconite production facility capable of producing 7 million metric tons of
taconite pellets.

"Building and operating the electric system to meet the energy needs of our
large natural resource based industrial customers on the Iron Range is what we
have been doing for decades,” said Minnesota Power Chief Operating Officer
Brad Oachs. “We are pleased that the completion of this project provides the
electric infrastructure backbone for Essar's planned current operations and
potential future growth in support of broader regional economic benefits.”

Essar is an electric customer of the City of Nashwauk, which receives all its
electricity through a municipal contract with Minnesota Power. When it reaches
full production, the Essar facility will require about 110 megawatts of
electricity. Essar continues to evaluate options and develop plans for future
growth including direct reduced iron, steelmaking and potentially other
product lines, which could ultimately result in a doubling, or more, of
electric power requirements as well as construction of an additional 230-kV
transmission line.

Minnesota Power signed an agreement in February 2012 to meet all of Nashwauk’s
electric requirements through June 30, 2024. Nashwauk subsequently agreed to
provide Essar with all the electric service needed for the company’s proposed
taconite facility and any additional future growth.

"We're proud to have completed the first major transmission build on the Iron
Range in many years, and we’re excited to begin the next stage of providing
electric service to Nashwauk and Essar Steel," said Vice
President-Transmission and Distribution Chris Fleege. "This new infrastructure
not only energizes Nashwauk and Essar Steel, it also enhances electric
reliability for the region.”

The project included construction of three new 230-kilovolt (kV) transmission
lines, one of which has a five-mile segment of double circuit 230 kV and 115
kV line. A 230-kV line was removed, and a 115-kV line was re-routed around the
Essar property, tying a Great River Energy circuit to the Minnesota Power 115
-kV system, and providing fiber communications to two new substations. In
total, 28 miles of lines were built and 21 miles were re-routed or removed.

One of the new substations, the McCarthy Lake facility, was built to serve the
taconite plant and the new Calumet substation will serve the mine area.
Ownership of these facilities and the costs to build them will be split
between Nashwauk and Minnesota Power. Substation construction began in August
2011 and was finished earlier this month.

It took about 45 contract workers to complete the clearing and construction
needed for the new transmission lines. Work on the 230-kV project was
completed March 8. Remaining work on the 115-kV line will be completed in
about two weeks.

Minnesota Power provides retail electric service within a 26,000-square-mile
area in northeastern Minnesota to 144,000 customers and wholesale electric
service to 16 municipalities. More information can be found at
www.mnpower.com.

The statements contained in this release and statements that ALLETE may make
orally in connection with this release that are not historical facts, are
forward-looking statements. Actual results may differ materially from those
projected in the forward-looking statements. These forward looking statements
involve risks and uncertainties and investors are directed to the risks
discussed in documents filed by ALLETE with the Securities and Exchange
Commission.

Contact:

Minnesota Power/ALLETE
Amy Rutledge, 218-723-7400
Manager – Corporate Communications
arutledge@mnpower.com
 
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