NASHWAUK, MN — The same company that took an Iron Range taconite mine site into bankruptcy in 2016 is now poised to be a key player in its development.
And they’re doing it by buying the debt of the company that’s trying to breathe new life into the Nashwauk site.
On Monday, Mumbai-based Essar Global announced in a news release it had purchased $260 million in face-value notes issued by Mesabi Metallics.
According to Essar, that purchase covers essentially all of Mesabi Metallics’ debt, and paves the way for Essar Global to participate in the iron ore mining and pellet manufacturing project.
Essar Steel Minnesota filed for bankruptcy in 2016, and Mesabi Metallics emerged with a plan to finish the Nashwauk mine and pellet plant. Chippewa Capital Partners owns Mesabi Metallics.
Then in September 2018, Switzerland-based Mercuria and Mesabi Metallics signed a non-legal commitment to make Mercuria a majority stakeholder in the project by the end of the year.
However as of Tuesday, Mercuria had not yet acquired Mesabi Metallics.
Spokespeople say more details about Essar Global’s role in the project are expected in the coming days.
MESABI METALLICS MISSES DEADLINE
Meanwhile, Mesabi Metallics has missed a year-end construction deadline at the Nashwauk site, triggering financial penalties from the state.
According to DNR spokespeople, the company failed to start construction on its value-added facility by December 31st, 2018.
Mesabi Metallics spokespeople say they informed the DNR back in November the company would not be able to begin construction on the site by year-end.
It’s unclear at this time what this means for the future of the project.