Mesabi Metallics invests $7.25 million into project

Mesabi Metallics Co. LLC said Wednesday it provided a payment late last week of $7.25 million to Itasca County and the Minnesota Department of Employment & Economic Development (DEED). The payment, the company said in a news release, was made in conjunction with a master lease agreement executed by Mesabi Metallics and the DNR in December 2020. That agreement has been the subject of court challenge. It has been at the heart of a district court decision that affirmed a Minnesota Department of Natural Resources (DNR) decision to terminate Mesabi Metallic’s mineral leases on state land at the site. That decision was uphead by the state’s Appeals Court but Mesabi has filed a petition for review by the Minnesota Supreme Court. The company is also in discussions with a strategic partner from the steel industry to invest into the Mesabi project, Mesabi Metallics revealed. Since 2017, Mesabi Metallics said, it has invested $339 million in its Nashwauk mining operation, of which $22 million was invested in 2022. Essar group, the company’s owner, has continued to invest in the Minnesota project. 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,” said Larry Sutherland, Mesabi Metallics president and chief operating officer. Mesabi Metallics said 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, Mesabi Metallics said. 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 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. A similar proposal was made when the project began, but Essar later dropped that aspect of the plan. “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 said. Mesabi Metallics said it has continued to maintain  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  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 added. 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.