Magnetation is a scram mining and iron ore processing company on the western Mesabi Iron Range. The company used a patented process to extract iron ore from old waste rock dumps. Now bankrupt, Magnetation announced that a buyer was prepared to acquire its idled assets.
A year and a half after declaring bankruptcy, and nearly a year after fully idling its Iron Range scram mining operations, Magnetation might finally have a new owner.
Company officials announced late Friday that ERP Iron Ore, LLC, a subsidiary of ERP Compliant Fuels, seeks to buy the idled Magnetation assets. A Dec. 15 bankruptcy court hearing will determine if the sale can move forward. The Itasca County board will hold a special meeting on the topic this Monday at 3 p.m.
Magnetation holds mining and processing operations in Keewatin, Coleraine, and Grand Rapids, along with a pellet production plant in Reynolds, Indiana.
ERP would present an intriguing new entrant to the Iron Range mining scene. The company is a wholly-owned subsidiary of the Virginia Conservation Fund, a nonprofit run by self-described environmentalist and health care executive Tom Clarke of the state of Virginia.
Clarke started ERP Compliant Fuels by buying up distressed Appalachian coal mines. Clarke would get the mines running again and then use the profits to buy carbon credits and mitigate environmental damage around the world.
That’s right. Clarke’s goal is to improve the environment by turning mining profits into a direct environmental cleanup fund.
In that regard, Magnetation would fit Clarke’s landscape reclamation model quite well. Magnetation extracts usable ore from decades-old mine waste rock found dotted along the Mesabi Iron Range landscape.
It will be up to the judge to determine if ERP’s bid can move forward. The deal would include Magnetation’s outstanding liabilities, as well as its facilities. That’s good news to any remaining creditors.
Even with the purchase of the Magnetation assets, we don’t know when Magnetation might reopen. But ERP has proven to be a legitimate actor in coal country. Perhaps it will prove the same in iron ore country.
It should be interesting to see how that model works here and its impact on jobs. I wish them well.
This doesn’t make sense. Buying up distressed coal mines to get them running again?
Sounds like this company needs a little more research.