Essar Steel Minnesota will delay the opening of its Nashwauk taconite plant until the second half of 2014, officials confirmed Thursday.

The plant, 90 miles northwest of Duluth, was originally slated to open this fall with nearly 350 workers.

In a phone interview Thursday, CEO and President Madhu Vuppuluri said the delay was due to financing issues surrounding the company’s 2012 decision to increase production from 4 million tons of taconite to 7 million tons.

The original plan called for $1.1 billion in spending. The new plan requires Essar to spend $1.7 billion. The company already has spent $1.1 billion. “We are at the advanced stages of” securing the additional $600 million needed to finish the project, Vuppuluri said.

He insisted that the plant delay is not related to softened global demand for steel, as some on the Iron Range have assumed. All of Essar’s Minnesota taconite is slated for use only in the United States and Canada and not China or India, he said.

Right now in Nashwauk, all the concrete foundations have been poured and a few steel beams have been erected. Essar’s giant ore crushers have been installed. Over the next year, the remaining steel beams and factory walls must be erected and other equipment installed.

Currently, about 100 Essar workers are on the site, along with up to 300 construction workers. The final plan still calls for 350 full-time taconite workers, officials said.

Allete Inc, which is the parent company of Minnesota Power, informed shareholders of Essar’s delay during a conference call Thursday. Minnesota Power is scheduled to sell 110 megawatts of power to run the Essar plant.

Tony Sertich, commissioner of the Iron Range Resources and Rehabilitation Board (IRRRB), said the state learned about Essar’s delay two weeks ago. “They have been under construction for the past two years. Projects of this size and scope sometimes have delays,” Sertich said. “This just pushes back the time frame for them to hire. But as soon as construction starts again, they will be looking ahead.”

The delay will not affect Essar’s $6 million loan with the IRRRB, Sertich said.