Pays $7.25 Million to Itasca County and DEED,

Bringing Total Investments Since 2017 to $339 Million

NASHWAUK, Minn. (Jan 4, 2022) — Mesabi Metallics Company LLC (Mesabi Metallics) this morning announced it provided a payment late last week of $7.25 million to Itasca County and the Minnesota Department of Employment & Economic Development (DEED), in conjunction with a master lease agreement executed by Mesabi Metallics and the DNR in December 2020.

 

Since 2017, Mesabi Metallics has invested $339 million in its Nashwauk mining operation, of which $22 million was invested in 2022 alone. Essar Group, the company’s owner, has continued to invest in Mesabi Metallics.

 

Almost $40 million has been paid to Itasca County, DEED and the Minnesota Department of Natural Resources (DNR). Mesabi Metallics has also paid approximately $5.4 million to Itasca County in the form of property taxes since 2017.

 

“Last week’s payment, and our previous investments, clearly demonstrate the continued commitment of Mesabi Metallics and Essar Group to bring to life this massive and critical project here in Nashwauk,” says Larry Sutherland, Mesabi Metallics president and chief operating officer.

 

Mesabi Metallics’ parent company, Essar Group, recently repositioned itself financially in order to invest with renewed vigor starting this year. It completed a debt repayment process through which about $25 billion was repaid to all its financial institutions, paving the way for additional investments into its portfolio companies such as Mesabi Metallics.

 

The debt repayment effectively made Essar Group debt-free from Indian banks and financial institutions. Armed with a much stronger balance sheet, Essar Group is now looking at reinvesting in building new assets and strengthening its existing operations using the latest in carbon neutral new-age technologies.

 

Mesabi Metallics has appointed a specialist international consultant to create a bankable feasibility study for a new value-added direct reduced iron (DRI), hot briquetted iron facility that would be built at the Nashwauk site.

 

“We are now moving forward on completing this project and emerging as a strategic partner and important enabler for the green steel evolution in North America, given the world’s renewed focus on the environment,” Sutherland says.

 

Mesabi Metallics has continued to invest in maintaining what already has been invested in Nashwauk, and in complying with all of the environmental permits it holds for its current construction and operations plans. Construction crews continue to work on the concentrator building, as it lies on the critical path of construction activities. The company also has been investing in detailed engineering plans, which are now very close to being completed.

 

As it prepares for construction work to ramp up this year, Mesabi Metallics has re-engaged with local northern Minnesota contractors who collectively already spent almost 3 million man-hours on the project.

 

“Mesabi Metallics and Essar remain committed to working with the State of Minnesota, the DNR and regional stakeholders to move this project forward, allowing us to scale up construction in 2023 and bring thousands of construction jobs and additional economic benefits to this region, and the state of Minnesota,” Sutherland adds. The company is also in discussions with a highly reputable strategic partner from the steel industry to invest into the Mesabi project.

 

Mesabi Metallics owns approximately 21,000 acres of land in and around the project, which includes about 3,000 acres acquired last year from Glacier Park Iron Ore Properties. Apart from the mineral leases from the Minnesota DNR, which constitute 39 percent of Mesabi Metallics’ total mineral leases, the company either owns or has leased other private mineral leases within the project boundary as well. These constitute the 6,655 acres of total mineral-bearing land that form part of the Nashwauk project.

 

About Mesabi Metallics

Mesabi Metallics is building a 7-million tons per annum taconite mining and direct-reduction grade pelletization project in Nashwauk, Minnesota. This is the first such project in the Mesabi Range in the last few decades and at the site of the old Butler Taconite mine, which closed more than 35 years ago. Project construction will produce up to 1,000 well-paying jobs. This project is more than 50 percent complete and when finished, will be the largest investment ever in Minnesota with more than $2.5 billion invested into it. To this end, Mesabi Metallics has already invested more than $1.5 billion and more than 3 million construction man-hours have been completed. Mesabi Metallics has large ambitions for the project, including DRI production.

 

About Essar Group

Essar Group is an international investor, owning a number of world-class assets diversified across the core sectors of Energy Exploration & Production, Oil Refining & Marketing, Power Generation, Infrastructure & logistics, Metals & Mining and Technology. The portfolio of Essar companies has aggregate annual revenues of about $15 billion and employ more than 7,000 people globally. Some of the company’s new projects include building the United Kingdom’s first $1 billion blue hydrogen project at its Stanlow refinery site, selected by the UK government; production of green hydrogen and green ammonia in India; and development of a new state of the art, 4-million tons per annum green steel production facility in the Middle East/North Africa region.

 

For more information, contact:

Dale Kurschner

Dale.kurschner@theplatinumgrp.com

763-567-9241

NASHWAUK, Minn., May 16, 2021 — Mesabi Metallics Co. LLC is delighted to announce the appointment of Lawrence Sutherland as President and Chief Operating Officer, effective May 15. Sutherland brings to the position the experience of a broad and successful 45-year career in the iron and steel industry, much of it in the Mesabi Range. Early in his career he was employed at the predecessor Butler Taconite facility as a millwright until 1985. Sutherland retired from U.S. Steel in 2020 after managing its Minnesota Ore Operations at Minntac and Keetac since 2013. Most recently he served as the CEO of Prairie River Minerals.

Sutherland will be responsible for day-to-day leadership on the site, and will ensure the mine and plant are properly and efficiently built and commissioned so they are operationally ready when construction is complete. His long experience on the Mesabi Range will be important in ensuring that the business meets best practices in all aspects of health, safety, environment and community relations. Mesabi Metallics looks forward to Sutherland’s contributions to the project’s mission of becoming a leading producer of high-grade iron ore pellets, providing jobs for the long term, and helping provide steel for America.

“I am excited to join Mesabi Metallics’s journey to complete the largest investment program in the history of Minnesota at the former Butler Taconite Mine, where I started my iron ore and steel career about 40 years ago,” Sutherland says. “I look forward to being part of an enterprise that will create multi-generation jobs at Nashwauk, from the construction phase through decades of ongoing operations.”

In addition, Mesabi Metallics is pleased to report that new and significant project activities are beginning on site in May. The company also expects to conclude a number of key construction contracts for steel works and other key activities in the coming weeks. As of this week, there are expected to be around 40 workers on site. This number is expected to increase substantially soon, following contractor mobilization and site readiness.

These developments follow a May 1 submission by Mesabi Metallics to the Minnesota Department of Natural Resources (DNR) satisfying conditions laid out in the December 2020 Amendment to the state leases. These conditions related to, among other things, cash payment to the DNR and Itasca County of approximately $25 million, binding offtake agreements for the pellets and committed financing facilities to complete the project.

Mesabi Metallics believes that it has met all material conditions necessary for the 2020 agreement to be fully effective. The company has received $100 million in cash out of the $200 million expected, which is more than adequate to progress construction activities for the coming months, and has signed binding and enforceable financing commitments for a total of $850 million required to complete the project. The financier had sought some additional time to fund the remaining $100 million required by the amendment on the grounds of significant disruption caused in travel and working conditions by the COVID-19 pandemic resurgence in several countries and particularly in India.

For these reasons, Mesabi Metallics has formally notified the DNR that it disputes the existence of a proper legal basis for issuing any termination notices in respect of the State Leases.

In the meantime, Mesabi Metallics remains fully committed to the project and is continuing to increase jobs on the site as it develops the mine for the benefit of Nashwauk and Northern Minnesota.

Mesabi Metallics is grateful for the local support and backing the project has in Nashwauk and its surrounding communities, and it looks forward to ramping up more 1,000 well-paid construction jobs over the coming months, and 325 well-paid operating jobs and more than 800 spin-off jobs once construction is complete and bringing substantial socio-economic benefits to the surrounding counties, and a major boost to the entire services sector in the area, immediately.

About Mesabi Metallics Co. LLC
Mesabi Metallics is building a 7-million tons per annum taconite mining and pelletization project in Nashwauk, Minn. This is the first such project in the Mesabi Range in the last few decades and one of the largest investments ever in Minnesota. Mesabi Metallics has already invested more than $1.5 billion into this project, which was unfortunately disrupted in 2016 due to circumstances beyond the company’s control. This project is more than 50 percent completed with substantial construction works already carried out and the majority of equipment either installed or stored at the work site. The project is expected to be commissioned well before May 2024, as agreed with the state.

For more information, contact:
Patrick Hynes
612-360-5110
phynes@messerlikramer.com

NASHWAUK, Minn. (May 28, 2021) — Mesabi Metallics LLC (“Mesabi Metallics”) today filed a lawsuit in Ramsey County District Court against the Minnesota Department of Natural Resources (“DNR”) asking the court for an order that would prevent the DNR from taking further actions to terminate mineral leases held by Mesabi Metallics and require the DNR to recognize the effectiveness of a 2020 Master Lease Amendment between Mesabi Metallics and the DNR.

Mesabi Metallics has complied with all material terms of the Master Lease Amendment and has already begun ramping up construction of a seven million tons per annum fully integrated iron ore pellet production facility in Nashwauk on the western Mesabi Range in northern Minnesota. This facility is expected to produce high-grade direct reduction and blast furnace pellets. Mesabi Metallics has approximately 40 employees and contract workers on site, and this number is expected to increase to into the hundreds by next spring and eventually, 1,000 construction jobs. Completion of the Nashwauk project will bring more than 350 full-time jobs and about 800 spin-off jobs to a site that closed 35 years ago.

Mesabi Metallics has at all times negotiated with the DNR in good faith and will continue to do so. Unfortunately, the DNR has taken positions related to Mesabi Metallics’ compliance with the 2020 Master Lease Amendment that are commercially unreasonable and not in the best interest of the State of Minnesota. Mesabi Metallics is confident that the recent actions of the DNR fail to meet the legal standard of reasonableness required of the DNR as a party to the Master Lease Amendment, and as a state agency that must manage Minnesota’s resources in an even-handed manner for the good of the state and its residents. The Mesabi Metallics project is precisely what the DNR’s mission statement says the DNR exists to support, yet the DNR in this instance is failing to abide by its own mission.

The DNR’s actions in recent weeks demonstrate both a failure to meet the legal standards, but more importantly, a failure to meet a standard of common sense and fair play that all Minnesotans understand. Should the DNR be allowed to stop construction of the most advanced mine on the Iron Range? Should the DNR walk away from the table when informed that the money would be deposited within three days of the DNR withdrawing the notice of termination? Should the DNR be permitted to try to stop the only viable means of reopening a mine shut down 35 years ago and, in so doing, threaten 1,000 well-paying construction jobs and more than 350 well-paying, multi-generation operations jobs? Of course not.
A lawsuit is never the preferred option, but in this situation it is necessary to ensure that construction can proceed on the timeline agreed to by Mesabi Metallics and the DNR in the Master Lease Amendment. Mesabi Metallics is asking the court to prohibit the DNR from taking further actions attempting to terminate the mineral leases, and for the court to declare that the Master Lease Amendment is valid and effective.

It is Mesabi Metallics’ continued hope that the DNR will return to the negotiating table in good faith so that all of the stakeholders who support this project can get to work completing a mine that will redefine the economy of the Iron Range for generations to come. One can always look at a glass and say it is half empty, but it is also possible in a spirit of positivity to say it is half full with the ability at hand to fill it completely.

About Mesabi Metallics
Mesabi Metallics is building a 7-million tons per annum taconite mining and pelletization project in Nashwauk, Minnesota. This is the first such project in the Mesabi Range in the last few decades and at the site of the old Butler mine, which closed 35 years ago. Construction will produce up to 1,000 well-paying jobs. This project is more than 50 percent complete and when finished, will be the largest ever in Minnesota with more than $2.5 billion invested in it. To this end, Mesabi Metallics has already invested more than $1.5 million and more than 3 million man-hours of construction completed. The project is expected to be completed within three years.

For more information, contact:
Dale Kurschner
Dale.kurschner@theplatinumgrp.com
763-567-9241