A bankruptcy trustee on Monday accepted bids on several of the former Magnetation and ERP Iron Ore facilities, providing a timeline on when the bankruptcy-burdened sites might finally have a new owner.
In federal bankruptcy court, the trustee approved Prairie River Minerals’ $1.95 million bid to purchase Plant 1 in Keewatin and the Jessie Load-Out facility near Grand Rapids while also approving a $1.7 million bid by MJM Minerals for Plant 2 near Bovey. The trustee, Nauni Manty, recommended Prairie River Mineral's bids in a motion to sale filed last month.
A judge will consider the motion for the sale on June 19 and the sale will then close 30 days later.
Two other companies — Bison Minerals and Buckeye Minerals — also expressed interest in Plant 4 outside Grand Rapids, but trustee Nauni Manty wrote in a status report filed Monday that other interested companies would be working with the site’s mechanic lien holders and Itasca County before filing an offer by June 28.
Under Magnetation, Plants 1, 2 and 4 and the Jessie Load-out facility employed more than 500 people at its peak in 2014, but closed shortly after 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.
Tom Anzelc, a Prairie River Minerals founder and former DFL state representative from Balsam, said Tuesday that the recently formed company is hoping to start production next year.
“Once the company is financed and the business plan is financed, a lot of activity will take place in order to get up and running in producing a product for steel mills in approximately a year,” Anzelc said.
Information on MJM Minerals was not available, but Anzelc said he believes it is a scrap metal company.
While Magnetation used giant magnets to pull out high-grade hematite from waste rock before turning it into pellets at its Indiana plant, Prairie River Minerals intends using the different material’s density to separate it out in fluid.
The project would employ 70 people in trucking work and another 37 workers and contractors in mining operations, a non-binding letter of intent filed last month by the Prairie River Mineral's attorney said.
Anzelc said Prairie River is in negotiations with potential customers.
“The world demand for iron ore products is high,” Anzelc said. ”We believe it will continue to be a commodity in high demand.”