A recently formed company is vying for several former Magnetation and ERP Iron Ore facilities near Keewatin and Grand Rapids, offering a potential future for the sites tangled up in bankruptcy court since last year.
Prairie River Minerals, LLC, which formed in January, placed a bid of $1.75 million on Plant 1 in Keewatin and the Jessie Load-Out facility near Grand Rapids. The company plans to use those facilities to extract ores from waste rock stockpiles, according to documents filed in federal bankruptcy court Wednesday.
The sites were previously operated by Magnetation, which had more than 500 employees at its peak in 2014, but closed its plant and filed for Chapter 11 bankruptcy in 2015 as iron ore prices plummeted.
Magnetation was sold to Tom Clarke, an entrepreneur from the state of Virginia, in 2016. Clarke pulled it out from bankruptcy as ERP Iron Ore before it also filed for bankruptcy in July 2018.
"(Prairie River Mineral) wishes to purchase the property immediately so it may rehabilitate the plant for immediate operation," Nauni Manty, the Chapter 7 trustee, wrote in the motion for sale filed Wednesday.
When reached by phone Wednesday afternoon, Tom Anzelc, a Prairie River Minerals founder and former DFL state representative from Balsam, declined to answer many of the News Tribune's questions, but said more information would be offered next month after the motion for sale is heard in court on June 19 in St. Paul.
"What I can tell you is what was made public today is part of the bankruptcy proceedings and the process. And yes, we have bid on assets. And because this is part of a long, complicated process, we have no further comment, and will not have any further comment until the second week of June," Anzelc said.
But some Prairie River Minerals plans were included in court documents Wednesday.
A non-binding letter of intent filed by the Prairie River Mineral's attorney said the company plans to take waste stockpiles left behind by prior mining projects throughout the western Iron Range and extract "high quality minerals from lower grade resources. Notably, (Prairie River Minerals') technology will allow it to supplement diminishing taconite resources with hematite (natural) ore."
Anzelc shared additional business details with Aaron Brown's Minnesota Brown blog last month. Brown was Anzelc's campaign manager during his time in the Minnesota legislature.
Asked by the News Tribune to confirm the information in that article, Anzelc said, "That information is what it is. You can draw your conclusions from that interview, and we do not have anything further to say at this time."
According to Brown's article, the Prairie River Minerals team also includes project manager Ed Shaughnessy, South African mining engineer and metallurgist Johann Grobler, retired U.S. Steel Minntac general manager Jim Swearingen and retired U.S. Steel manager Scott Conley.
The Minnesota Secretary of State Certificate of Organization - issued to the company on Jan. 9 - lists William Shaughnessy as the organizer and Brown listed him as "acting CEO" in his article.
While Magnetation used giant magnets to pull out high-grade hematite from waste rock where it was then turned into pellets at its Indiana plant, Prairie River Minerals would take a different approach in extracting hematite from waste rock.
According to Brown's article, the company would not produce iron concentrate or pellets; instead, it would send lump ores and sinter fines to steel companies with appropriate blast furnaces.
In its letter of intent, Prairie River Minerals said the market for its product would be strong because of rising costs of iron ore and less supply from Brazil. A tailings dam at Vale Brazil's Feijo mine in Brazil broke in January, killing more than 200 people, halting several of its mines and causing the price of iron ore to rise above $100 per ton for the first time in five years.
"The conditions in the iron ore market are now conducive to new entrants, and some US mining
companies have already announced expansions of their operations (Cliffs). (Prairie River Minerals) aims to disrupt its competitors by putting a low-cost alternative on the market," the letter of intent said. "(Prairie River Minerals') mission is two-fold: First, to replace imports, and second, to ride the wave of high iron ore prices caused by supply interruptions from Brazil."
According to the letter of intent, Prairie River Minerals' would employ 70 people in trucking work and another 37 workers and contractors in mining operations.