Essar Steel Minnesota on Thursday announced it has named a new chief executive officer, as the company tries to hang on to its investment in its half-built Nashwauk taconite project.
Matthew Stock replaces Madhu Vuppuluri, who had served as CEO since 2007. Stock has more than 25 years of experience in the metals and mining industries, the company announced, and "has led efforts to build and complete several iron ore beneficiation and pelletization facilities around the world."
"I am very excited about the opportunity to get the project back under way and to see it through to completion as quickly as possible," Stock said in a news release. "We face many challenges, but overcoming them will be more than worth it when the plant goes online and becomes the lowest-cost iron ore pellet producer in the U.S."
Vuppuluri has taken a new leadership position with Essar Capital, the company announced.
"The experience that Matthew brings to the table is a critical ingredient in our strategy to finally realizing the vision we originally had when we first began investing in this important Minnesota project," Prashant Ruia, a member of Essar Steel Minnesota's board and a director of Essar Capital Limited. "To get the plant completed under the current circumstances, we recognized that a change in leadership was needed."
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The state of Minnesota last week pulled state mineral leases out from under Essar and is vowing to give them to rival Cliffs Natural Resources. The leases are critical for access to the rich taconite iron ore at the proposed Nashwauk mine site.
State officials said they felt they had the legal right and in fact obligation to take the leases back because Essar had failed to advance the project as promised and failed to pay some contractors. But Essar disagrees, saying it filed for Chapter 11 bankruptcy protection before the leases were terminated. That appears to put the issue in the hands of federal bankruptcy court.
Essar on Monday said it has signed a "nonbinding letter of intent" with investment firm SPL Advisors LLC to pump $250 million of new equity into the Nashwauk project, which has been idle since 2015.
The Nashwauk facility was to be one of the state's largest private construction jobs and the first all-new major taconite operation on the Iron Range in 40 years. Plans originally called for an iron and steel plant on the site, creating even more jobs, although Essar scrapped those years ago.
Ground was broken in 2008 on the taconite project, but work occurred in fits and starts. Essar said it obtained $850 million in financing in 2014 and did restart work in earnest last year. As recently as October, the company appeared poised to finish the project and begin making taconite pellets late this year. But that promise was dashed last winter when 700 construction workers and even most of Essar's own newly hired employees were pulled off the project.
