Part of the taconite plant under construction at what was then Essar Minnesota’s Nashwauk project in May 2015. (Aaron J. Brown)
Earlier this year, Cleveland-Cliffs lost its bid to acquire the former Essar Steel Minnesota project in the Mesabi Iron Range town of Nashwauk, Minnesota to Chippewa Capital Partners. However, Business North reports that Cliffs is back on the scene today after buying land and mineral rights previously attached to that project.
From that story:
The land was acquired from Glacier Park Iron Ore Properties LLC. The interests are part of the Biwabik Iron Formation and include mineral and surface leases along with a combination of undivided and whole fee interests. The acreage acquired is approximately 553 acres and the acreage being leased is approximately 3,215 acres.
The purchased properties include parcels that were formerly leased to Mesabi Metallics Co., previously known as Essar Steel Minnesota, by Glacier Park, said Cliffs Chairman, President and CEO Lourenco Goncalves.
“We are enthused about the acquisition of this property, which came into play after Chippewa failed to follow through on its obligation to obtain financing and a bankruptcy exit for Mesabi Metallics by October 31,” he said in a prepared statement. “Despite several botched attempts by others, it is now the time for Cleveland-Cliffs to sit at the table with other responsible parties and develop a realistic solution for this site.”
In other words, Chippewa Capital Partners now must play ball with its chief rival if it is to develop the Nashwauk site.
Iron Rangers know Cleveland-Cliffs, one of the longest running mining and resource companies in the country. Cliffs owns or runs three taconite plants on the Mesabi Range. Chippewa Capital Partners is brand new, a holding company backed by Virginia state entrepreneur Tom Clarke and British steel company Liberty House.
Cliffs low-balled its bid during the Mesabi Metallics bankruptcy proceedings, losing out to Chippewa Capital Partners. However, Cliffs CEO Lourenco Goncalves always maintained that his company would get the project eventually, casting doubt on the ability of the new owners to raise funds. The failure to secure necessary financing was the same problem that put Essar out of business in the first place.
Goncalves must sense opportunity, because once again the new owners beg more time to procure funds. In 2016, Goncalves told business and political leaders he wanted to make pure iron ore pellets for electric arc furnaces at Nashwauk.
This proposed project would reopen the former Butler Taconite mine, which closed in 1985 amid a major consolidation in the U.S. steel industry. The quality of the remaining ore, and hopes of producing a purer “value-added” iron ore product, however, have stoked the hopes of a new project ever since. Some have even suggested a steel mill on the site someday, though market realities would put that as a more distant possibility.’
At this point, after more than a decade of wrangling, anything that put people to work on the incomplete plant structure looming over the Nashwauk skyline would be welcome to the Iron Range.
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