Minnesota DNR terminating mining leases of floundering Mesabi Metallics – Twin Cities

2021-05-05 18:43:16 –

The Minnesota Department of Natural Resources has begun leasing Mesabi Metallics, a troubled semi-finished iron ore mining project on the Nashwauk. This is because the company couldn’t prove that it had enough cash on hand.

After a series of deadlines, DNR, with the approval of the Minnesota Executive Committee, changed the Mesabi lease in December, giving it a final chance to prove that the project could be completed.

In a news release Wednesday, DNR said it did not show that it had $ 200 million in its account on May 1. This is “not meeting the basic requirements” of the modified lease. If you do not meet the modified lease, the lease reverts to the original terms that the company violated.

“After the initial review, DNR determined that Mesabi could not prove that $ 200 million was immediately available in the account, as required by the 2020 amendment,” DNR said. Said in the news release.

DNR terminates lease as Mesabi still borrows $ 18 million in 2020 minimum base payments and was unable to mine 1.6 million tonnes of ore from state-owned land at least two quarters before January 1, 2021 Said to start the process of doing. Construction could not be completed by the end of 2019 and 3 million tonnes of pellets could not be shipped by the end of 2020.

Mesabi did not immediately respond to the Forum News Service’s request for comment on Wednesday afternoon.

The DNR said it would continue to consider all other documents by May 1. Other requirements include securing a $ 850 million equity and debt commitment to finance the pellet plant, establishing an off-take contract for 4 million metric tons of taconite pellets annually, and missing $ 24.5 million. Rent and Loyalty Escrow Account and Employment Economic Development Bureau Settlement.

Before giving the project a final May 1 deadline, the company leased as early as 2020 after missing many deadlines and payments from late last year to early this year, including the completion of the plant by the end of 2019. I should have been able to cancel. ..

Mesabi Metallics — the former Essar Steel Minnesota project with multiple owners, managers and names — has been plagued by construction suspensions, bankruptcies, late deadlines, late payments and other legal struggles. After more than 10 years of work, the project was about half completed. Essar left a $ 1 billion debt after leaving the bankruptcy project in 2015, but the Mumbai-based company reappears after paying about $ 260 million in debt. did.

Iron Range lawmakers and others have long asked DNR to transfer the lease to Cleveland Cliff, a mining and steel company that owns patchwork on the Nashwauk site, but DNR has long allowed it. He said he would resume the process.

Minnesota DNR terminating mining leases of floundering Mesabi Metallics – Twin Cities Source link Minnesota DNR terminating mining leases of floundering Mesabi Metallics – Twin Cities

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