Cliffs CEO strikes positive tone with Range lawmakers

Iron Range newsAccording the reports I’ve read and gathered on my own, Cliffs CEO Lourenco Goncalves had two goals for the private meeting he held Monday night, Jan. 12, with Iron Range lawmakers: 1) to stress his company’s commitment to its Iron Range operations, and 2) to vehemently oppose state funding of the Essar Steel plant near Nashwauk. That message was delivered and received, loud and clear.

This private (but certainly not secret) meeting offers an interesting opening to a session that will include some kind of request by Essar to reorganize the terms of its $67 million loan. Essar wants to produce 7 million tons of taconite annually. Gonclaves and Cliffs believes that any subsidy to the company to create that production will create unfair competition with the other Range taconite mines, three of which are partially owned and wholly-operated by Cliffs.

The news here is that Cliffs is not threatening layoffs or plant closures directly. According to someone inside the meeting, there was also the hint that if Essar ever backed off the project that Cliffs might be interested in taking it over. Gonclaves goal here was to influence the upcoming debate over Essar; certainly it seems he had that effect.

One must always remember, however, that projects, goals and statements in the mining industry are based on factors that can change suddenly, outside the power of the people doing the talking. It’s more like whaling than one would care to admit.

UPDATE: The Star Tribune and others also reported on this meeting. Dee DePass interviewed local legislators, at least one of whom seem to be open to letting Essar sink or swim on its own.


  1. It all gets back to the IRRRB and state deciding to pick Essar as viable partner and structuring a one sided deal that gave Essar the leverage. Now Essar is trying to hold both IRRRB/state hostage to the millions they’ve already doled out. Govt (politicians) should never be in picking who’ll they give OUR money to business. Does anyone trust that Tomassoni is being a good stuart of our money if RAMS wins sweetheart deals from State and IRRRB??? I understand why Cliffs is concerned about an unfair playing field vs Essar…… Once again IRRRB/politicians do more harm than good with millions and millions of dollars at their disposal.

  2. I don’t see how we can win either way. If we give Essar the extension, their business ups and down will lead to an inability/unwillingness to pay us back. If we don’t, we’ll enter into a lawsuit that will take years and we’ll never get paid back.

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