DNR reinstates Chippewa Capital's mineral leases at Nashwauk site
Chippewa Capital Partners, the parent company of Mesabi Metallics, has its mineral leases back.
Mesabi Metallics is planning to finish a taconite mine and processing center and also build an iron plant on the Nashwauk site that Essar Steel Minnesota left several years ago. The company recently met its final financing requirements to get the mineral leases reinstated, according to a review by the Minnesota Department of Natural Resources.
The company satisfied all seven requirements set by the DNR in a December 2017 settlement agreement after Mesabi Metallics pulled out of bankruptcy earlier that month.
“We looked at each of those things that they were required to do, the documentation that they had provided to us about what they had done to meet that condition and concluded that yes, they had done satisfactorily each of the things that they were required to do,” Naramore told the News Tribune.
The last requirement showed Chippewa, with Dubai-based equity firm D.S.A., made $250 million available for construction, Chippewa owner Tom Clarke said. An additional $650 million, lended by Switzerland-based Riverdale Commodities, was also posted, according to documents provided by the DNR. That met the DNR’s June 30 deadline for “closing transactions for at least $850 million in binding and enforceable debt/equity commitments.”
Clarke said he was celebrating the DNR’s decision to reinstate their mineral leases.
“It’s like running a 1,000-mile marathon or something,” Clarke said. “Feels good to get to the finish line.”
Last month, Clarke said he was confident construction could begin in July. Now, he’s thinking it could take another 60-90 days as engineering and design plans are still being worked on.
Clarke plans to build both the pig iron plant and pellet plant at the same time, but said it will be a few years until the first pellets are produced.
While Democratic Gov. Mark Dayton had no role in the approval process, he expressed his support for the decision in a release Wednesday.
“The company's success will bring new jobs and economic vitality to the Iron Range,” Dayton said.
Once the plant is up and running, Clarke expects to employ 250 people full-time.
While the DNR’s decision opens up key mineable ore at the Nashwauk mine site for Chippewa, the company is waiting for a federal bankruptcy judge in Delaware to decide if Glacier Park Iron Ore Properties had the right to pull its mineral rights at the site out of a bankruptcy agreement and sell them to Cleveland-Cliffs.
Clarke has said that outcome shouldn’t matter, however, as he can still finish the project with the leases he has.