The new CEO of Mesabi Metallics, Matthew Stock, wants to meet with Minnesota Gov. Mark Dayton to argue his case that his company can finish a brand new yet somehow beleagured taconite mine.
It was clear from Gov. Dayton’s statement on Feb. 8 that he wasn’t ready to jump on the Mesabi Metallics bandwagon. Sure, the former Essar Steel Minnesota has new owners, new leadership and a new name. Yet, Dayton still doesn’t believe the company has a good shot at finishing the new $1.9 billion mine on the western Mesabi Iron Range.
“In its [bankruptcy reorganization] filing, Mesabi Metallics again failed to demonstrate any ability to finance the completion of the Essar construction project or to operate it successfully,” said Dayton. “For the past 16 months, Essar/Mesabi Metallics has been unable to show the solid financial commitments, sufficient to complete the project and to repay the Range contractors the money they are owed.”
Dayton stood by his position favoring the denial of leases to the former Essar company.
“Mesabi Metallics proposes that it be granted possession of the State’s mineral leases for the next 17 years without any commitment to complete the project or begin mining,” said Dayton. “The DNR terminated those leases last July, when then-Essar once again failed to meet the leases’ conditions. However, Essar declared bankruptcy, thus blocking the State’s rightful termination of them.”
But in a Feb. 15 letter, Stock said this claim simply wasn’t true.
“Our proposal to assume the leases in connection with a reorganization does not suggest that the Company should be granted possession of the State mineral leases without a clear path to completion of the plant and continuation of mining,” wrote Stock.
Dayton had also said that his prime objective was to get the plant up and running. He did not believe that Mesabi Metallics represented the best way forward.
“I want that half-completed project to be completed and to fulfill then-Essar’s long-broken promise to bring new jobs to the Iron Range. Regaining the State’s rightful control of its leased properties, so that through an open process they can be transferred to a company with the demonstrated ability to develop and operate a successful project, is essential to bringing important new jobs to the Range. I therefore support the DNR’s decision to object to Mesabi Metallics’ proposal.”
Stock wants to meet with Dayton to explain how they plan to finish the project.
“It is unfortunate that we have been unable to meet so that I can explain more about the company’s reorganization,” wrote Stock. “If Mesabi is able to successfully reorganize and resume construction, then many hundreds of millions of dollars will be invested in northeastern Minnesota in the next two years. Considering what has already been invested and spent, the project retains the prospect of being among the largest economic development projects in the history of the state of Minnesota.
“Mesabi Metallics is a new company, with new management and a new proposed sponsor,” continued Stock. “We are required over the next several months to make a showing to the Bankruptcy Court that our reorganization plan is feasible. I cannot understand why the State alone opposes this effort and seeks to prevent reorganization by opposing assumption of the State leases. I therefore respectfully request that you reconsider the State’s position in this matter, withdraw the State’s objection and allow the reorganization process to proceed in the Bankruptcy Court as contemplated in our reorganization plan.”
Mesabi Metallics is working hard to reverse years of bad dealings during the Essar years. Across Northern Minnesota, citizens seem hopeful about the new owners, but aren’t betting on anything. Time will tell whether Dayton takes this meeting. In situations like this, words matter a lot less than actions.