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Steel Dynamics Inc. (SDI) will invest big dollars in an attempt to become a larger North American rail supplier. Yesterday, the company announced it will spend $200 million to expand a Columbia City, Ind., mill’s annual capacity from 1 million tons to 1.6 million tons to produce more rail and other steel products.

SDI will modify an existing caster, and add a reheat furnace and second rolling mill with associated material handling systems. The company expects to begin the project in spring and complete it in about 18 months.

The mill — which since late 2004 has produced industrial-grade steel rail — will manufacture 240- to 320-foot-long rail, which workers will weld into quarter-mile-long “strings” at a soon-to-open welding facility.

By mid-2006, SDI expects to begin shipping standard rail to one or more Class Is and producing premium head-hardened rail. The company eventually will supply 300,000 tons of rail per year to U.S. and Canadian railroads, SDI officials estimate.