Contractor files lien on Essar; millions unpaid

Iron Range newsMore details about the shaky financial situation at the Essar Steel construction site near Nashwauk, Minnesota are coming to light:

  • Nobody is working at the Nashwauk site now.
  • Millions are owed to construction contractors and laborers.
  • At least one contractor has filed a lien on the project.
  • Essar says it hopes to have its financing in place to continue the project after the first quarter of this year, which would include paying its very large overdue bills.

WDIO reported the story in this way:

As you can see in the story, what’s at stake here is $73 million in public funds already spent; not just committed, but largely spent down the nub for railroad tracks, roads and the pouring of large concrete foundations and fittings. India-based Essar Steel has vowed to provide the rest of the approximately $1.6 billion through its own financing, but has struggled to do so since the beginning of the project.

The project was originally conceived as an innovative integrated mine and steel mill, hence the huge amount of state and IRRRB investment. However, shortly after ground broke five years ago, it became clear the company intended only to open the mine, essentially replacing the old Butler Taconite plant that closed in the early 1980s.

The old saying, “owe the bank $10,000 and you’re in trouble, but owe the bank $10 million and they’re in trouble” certainly applies here. The construction labor, local leaders and area residents are united in wanting what most of them have wanted all along — a new age taconite plant on the western Mesabi. Frustration, however, runs high in all corners, and we are left wondering whether Essar Steel will be able to finish what they started.

Perhaps Essar Steel frees up some financing after the first quarter as they say, or perhaps they package the project for sale to a steel company in need of a reliable ore source. The state and region are the ones on the hook for most of the spending so far. Again, and again, we wait.


  1. Finally someone is saying the emperor has no clothes. It’s been the 800 pound gorilla in the room for a long time.

  2. Do you know anything about that other mine proposal. Somewhere I read that the company that is doing all the proposing, etc. really only consists of 12 employees. Just wondering how much the IRRRB etc funding encourages scams.

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