The former owners of the Magnetation iron ore processing operations on Minnesota's Iron Range are moving north, starting a new company working to reopen an idled iron ore mine in eastern Canada.
Matt and Larry Lehtinen have formed Tacora Resources Inc. and on Tuesday announced the new company has acquired "substantially all of the assets associated with the Scully Mine located in Wabush, Newfoundland and Labrador, Canada,'' the company said in its inaugural press release.
The acquisition comes after an "asset purchase agreement" that Tacora reached in June with Wabush Iron Co. Limited, Wabush Resources Inc. and Wabush Lake Railway Company Limited under Canadian corporate reorganization regulations.
The Scully mine was formerly owned and operated by Cliffs Natural Resources, which closed operations and walked away from what it called an unprofitable venture in early 2014.
The Lehtinens say they have a signed purchase agreement from Minnesota-based Cargill to buy all of Scully's iron ore through 2022. The Scully operations can produce up to 6 million tons of finished iron ore annually.
The ore likely won't compete with Minnesota ore at U.S. steel mills but instead will go mostly to Asia and Europe through a deep-water port in Quebec, Matt Lehtinen told the News Tribune.
Tacora also has an agreement with the United Steelworkers union to operate the facility.
"We have formed a great working relationship with the USW. We worked closely with them to structure a new (collective bargaining agreement) in an effort to bring back mining jobs to Labrador West,'' Matt Lehtinen said in a press release. "This region has a rich tradition in iron ore mining and with the continued support of all stakeholders, the people of Labrador West can look forward to seeing Scully's valued iron reserves come back into production."
Tacora's website says it's based in Grand Rapids with Larry Lehtinen listed as the CEO and Matt Lehtinen as chief operating officer.
Grand Rapids-based Magnetation LLC was founded in 2006 and was a joint venture between Grand Rapids-based Magnetation Inc. and AK Iron Resources LLC, an affiliate of steelmaker AK Steel. Magnetation recovered valuable iron ore from waste dumps left behind by long-closed mining operations. It sold its finished pellets to AK's steel mills in Ohio. Under the direction of Magnetation CEO Larry Lehtinen and his son, Magnetation President Matt Lehtinen, the company grew rapidly. At its peak in 2014, the company had more than 500 employees, including more than 400 on the Iron Range.
But the company was hit hard when the price of iron ore plummeted from more than $100 to less than $50 per ton through 2014 and 2015. The company began to close plants in 2015, and Magnetation filed for Chapter 11 bankruptcy reorganization in May 2015.
Magnetation's operations have since been brought out of bankruptcy by ERP Iron Ore, a company owned by billionaire Tom Clarke, who also recently purchased the bankrupt assets of Essar Steel Minnesota.