Essar Steel’s Algoma mill in Sault Ste. Marie, Ontario is reorganizing in bankruptcy after massive debts inhibited operations. The Sault Star reports that Essar filed for bankruptcy protections from both the Canadian and U.S. governments. Algoma’s corporate parent Essar will infuse $300 million into the facility to allow for existing debt to be refinanced.
What’s not clear at this time is how this problem at Algoma applies to the continued delays at Essar’s new taconite production plant near Nashwauk in Northern Minnesota. The pellets that Essar Minnesota plans to produce were supposed to go to Algoma (in addition to the general market place). Since one of the things Essar cited in the bankruptcy was decreased demand, it would appear the delays in Minnesota are more than just financing; rather, the company is probably going to wait until demand merits the completion of the project.
Naturally, that’s speculative, because we just don’t know what’s really going on at the half-finished taconite mine in the middle of the woods of eastern Itasca County, Minnesota. But considering about $100 million in public financing went into the infrastructure at Essar’s site north of Nashwauk, the people here sure would like some answers.
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