Earlier this month, Cleveland Cliffs announced that it acquired land associated with the former Essar Steel Minnesota mine project in Nashwauk. At the time, I and others wondered how significant this news would be. Well, the Mesabi Daily News reports that an anonymous source says Cliffs now controls a critical part of the project, including access to the main iron ore pit.
This leaves Chippewa Capital Partners, current owners of the project, in a bind. They must work with Cliffs, or sell to Cliffs. Avoiding them will be impossible.
The Itasca County Board called a special meeting at 4:30 p.m. today to discuss the changing conditions of the Essar Steel Minnesota bankruptcy situation. The county built the road, rails and power substations for Essar with state bonding funds.
Throughout the western Mesabi Range, the renaissance of the old Butler Taconite site represents the golden promise of an innovative new age of iron mining and steelmaking. The future of the Iron Range mining industry requires the whole region transition to producing iron for electric arc furnaces. Arguably, this goal is far more vital than mining new minerals like copper and nickel, though it gets a small percentage of the attention.
Nevertheless, through good times and bad, the Minnesota Iron and Steel Essar Steel Minnesota Mesabi Metallics Chippewa Capital Partners project has suffered from broken promises and failed hopes for more than a decade. One gets the sense that the public officials who actually get to preside over the ribbon cutting are being conceived on a hockey bus at this hour.
But Cliffs says it will act swiftly if it gets ahold of the project.
As the Mesabi Daily News reports, officials with Chippewa Capital Partners and the state of Minnesota have yet to meet with Cleveland-Cliffs. At stake are mineral leases and control of the partially complete mining and processing facility.
The state of Minnesota and Chippewa are now left weighing their options as another deadline to meet the state-owned minerals lease agreement comes due Dec. 31. Gov. Mark Dayton’s office declined to address specific questions pertaining to the leases, the deadline or any plans or discussions with Chippewa.
“The purchase and leasing of private property holdings by Cliffs came as a complete surprise, and it presents significant additional challenges for the Chippewa Capital Partners project,” said Matt Swenson, deputy chief of staff for Dayton, in a statement. “The governor is intensively reviewing possible options with his project team.”
Cliffs declined comment for this story. Tom Clarke, the state of Virginia billionaire leading the Chippewa group, did not immediately return requests for comment. A spokesperson for the Minnesota Department of Natural Resources said in a statement that Chippewa continues to hold the permits and state leases, and the state is reviewing the implications of Cliffs’ acquisition.
And what brought this about? Apparently the private land and fee owners approached Cliffs with the opportunity. They must have seen something they didn’t like in the new owners.
As for the art on this post, I wasn’t sure I’d get to reuse my 2016 cartoon depicting Cliffs’ deft maneuvers to acquire the Nashwauk mine site. As it turns out, all I had to do was scrub out “Essar” and add the clunky phrase “Chippewa Capital Partners.” This confederation of financiers now must prove that we should bother learning that name.
I’ve been around this story long enough to know that everything we see is part of an elaborate, hostile set of negotiations. The media, myself included, is often unwittingly led to participate in this escapade. But if this is a game of chess, Cliffs CEO Lourenco Goncalves appears to have his rivals in check.
Check out the Duluth News Tribune article from last night. Sounds like one side is exaggerating the situation and the other is downplaying it. I guess we will see who is blowing smoke very soon.