Part of the taconite plant under construction at Essar Minnesota’s Nashwauk project in May 2015. (Aaron J. Brown)
As the old saying goes, familiarity breeds contempt. Today, a bankruptcy court in Delaware ruled on the case of Essar Steel Minnesota. The judge didn’t go with the incumbent, now renamed Mesabi Metallics. Nor did the well established Cliffs Natural Resources prevail.
Instead, Chippewa Capital Partners, LLC, a group controlled by Tom Clarke’s ERP Iron Ore, announced this morning that they were the successful bidder for the former Essar project. ERP also took over Magnetation assets after that company’s bankruptcy last year.
In other words, a mining industry player no one heard of a year ago now controls all of the active mining properties west of Keewatin, including some of the best untapped iron ore lodes on the Range.
To say this is a surprise would be an understatement. However, on another level it makes sense. Cliffs offered a paltry $75 million for the property. That wouldn’t have paid back many of the creditors. Local contractors alone are owed $50 million. Meanwhile, Mesabi Metallics faced serious doubts about its post-Essar Steel Minnesota reorganization plan.
As WDIO reports, Clarke’s group will offer $350 million to pay creditors while packaging $1 billion to finish the plant at the former site of Butler Taconite near Nashwauk. It’s still not clear who ERP’s customer will be, or what will be its timeline for completing the project. Nevertheless, the Chippewa Capital Partners bid satisfied the bankruptcy court as the most likely to serve the best interests of the most parties involved.
Another hearing will be held May 22 to finalize the ruling. This includes an additional ruling on whether the judge will award the mineral leases or release them, as the State of Minnesota has requested.
This proceeding continues. But today’s events represent a stunning turn of events.
Outsider?? The bidders, the bankrupt guys and even the judge are from out of town….They are all outsiders..Jeeez!!
To date, ERP hasn’t operated a mine in Minnesota. Cliffs obvious has, and has also been vocal about its plans for the past year. Meanwhile, Mesabi Metallics is the successor to the company that started the project. Obviously all Iron Range mines are owned by outsiders. The point in using that word was that ERP/Chippewa was a late entry in the bidding process, while also being a new company in Minnesota.
50 % of new venture Gupta family of Liberty House UK, who gas to put up 1 / 2 of $ 625 million funding due no later than August 31, 2017…….. or State of Minnesota cancels all minerail leases !