The new owners of the Essar Steel Minnesota property in Nashwauk say that they have already spent $250 million on the site and expect to spend $400 million more to finish building the mine and iron ore processing complex.
Now called Mesabi Metallics, the company has 50 workers on the Iron Range site, where a much-anticipated $2.65 million taconite project was left half done by Essar when it declared bankruptcy in July 2016. The bankruptcy occurred after Essar broke several promises to the state and missed key milestones to receive public incentives for what was supposed to be a major new production facility on the Iron Range.
Mesabi's staffing should double in about two or three weeks and continue growing into 2019, Mesabi spokesman Darin Broton said. The number of employees should eventually reach several hundred.
The company updated Governor Mark Dayton on its progress at a meeting Tuesday.
Dayton said Mesabi officials, including interim CEO Gary Heasley, told him full construction will be fully staffed by March 2019, and that they need to draw up new engineering plans and perform other preliminary work. They said Mesabi would put $30 million to $40 million more into the project by the end of this year and plan to have the taconite pellet plant done by the end of the year.
While acknowledging that the investments are "serious money," Dayton said he would like to see more progress and more specific plans.
"We remain hopeful that this will move forward successfully," he said. "But we've all been burned so many times, people up here even more so in their lives and their livelihoods," he added, referring to the Iron Range.
Still, Dayton said Mesabi is the state's only option to get the project done.
"This is like driving on a bumpy road with twists and turns but there's a cliff on either side," he said. "Everyone benefits if this succeeds."
In a statement following the meeting, Heasley thanked the governor for being a "steadfast champion" of the project.
"While there have been several interruptions in the development of this project over the years, Mesabi Metallics remains the only entity that can move this mine project forward," Heasley said. "The governor and state agencies have taken prudent steps to create multigenerational mining jobs on the Range. As we told the governor this morning, Mesabi Metallics and Chippewa Capital Partners continue to invest in engineering and construction on the site to move this project forward."
Led by businessman Tom Clarke's Chippewa Capital Partners group, Mesabi bought Essar out of bankruptcy last year. The company is now controlled by Nubai Global Investment, a British Virgin Islands firm that bought Mesabi from Clarke's team through two transactions in 2017 and 2018.
Tuesday's meeting was meant to reassure Dayton that the project, a decade in the making, will be completed.
In 2007, the Mumbai-based owners of Essar Steel first bought and leased the Nashwauk property and began building a massive ore and taconite processing complex. But progress sputtered on and off due to chronic financing problems.
After Mesabi brought Essar, a host of new problems arose — including lawsuits between new and past owners, suits against the state and suits from Cleveland-Cliffs, which made no secret that it wanted the Nashwauk mining property.
Broton said the company is working to settle the issues that Cleveland-Cliffs has in regard to the property, including a lawsuit filed by Cleveland-Cliffs against the state Department of Natural Resources.
Dee DePass • 612-673-7725
