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Cleveland-Cliffs sues DNR, Mesabi Metallics over Nashwauk permits

A mound of shattered taconite iron ore from an earlier blast in Mesabi Metallics' mine in Nashwauk. (2017 file / News Tribune)

Cleveland-Cliffs filed a lawsuit Wednesday against the Minnesota Department of Natural Resources, its commissioner Tom Landwehr and Mesabi Metallics over permits to mine at a site near Nashwauk.

In the lawsuit, Cliffs is challenging the DNR's refusal to modify Mesabi Metallics' mining permits and prohibit them from conducting mining operations on properties owned or controlled by Cliffs.

Mesabi and Chippewa Capital Partners, its parent company, are trying to finish the taconite mine and processing center at the former Essar Steel site near Nashwauk left by Essar Steel Minnesota several years ago.

Earlier this month, a federal judge said former owner and CEO Tom Clarke could no longer represent himself as a Mesabi and Chippewa employee after the Dubai-based Nubai Global Investment removed Clarke from his post in July.

The lawsuit claims an estimated 1.1 billion tons of "in-situ inferred taconite resources" owned by Cliffs resides within the boundaries of the DNR-issued permit to mine held by Mesabi, even though the company has no legal rights to mine those resources.

Cliffs purchased surface and mineral rights to numerous parcels at the Nashwauk site from Glacier Park Iron Ore Properties, which a federal bankruptcy judge in Delaware ruled July 23 was legal.

Cliffs claims in the lawsuit that it sent a letter March 19 to the DNR requesting the permit to mine be modified, transferred or revoked to prohibit unauthorized and illegal taconite mining operations on its property and interference with Cliffs' own mining interests by Mesabi.

The lawsuit says in a letter dated May 17, the DNR denied Cliffs' request and stated it would address any amendments or modifications to the permit with Mesabi. Cliffs claims it then sent another request to the DNR after the July 23 court ruling asking for the permits to be modified, transferred or revoked and the DNR once again denied Cliffs' request.

Cliffs and Glacier Park then sent a "notice of revocation of the limited license agreement dated Nov. 1, 2017" to Mesabi in which it revoked the company's non-exclusive revocable license to access the properties now owned by Cliffs. The notice became effective 10 days after Mesabi received it and asked Mesabi also to remove all personal property located on those properties within the same 10-day period.

Prior to selling the mineral rights to Cliffs, Glacier Park had provided a limited license agreement to Mesabi that provided Mesabi access to, but not mine, the properties owned at the time by Glacier Park.

Mesabi responded to Cliffs and Glacier Park saying that the limited license agreement was invalid because Mesabi never executed and delivered it to Glacier Park and further asserted that "any and all rights to access" Cliffs' properties "are circumscribed and governed by the leases, operating agreements, related documents and Minnesota law," the lawsuit said.

On Aug. 16, the day after Mesabi's response, Cliffs served the company with a "notice of trespass" and a "notice of use or occupancy impairing or impeding rights of co-tenant" and as of Wednesday Cliffs' claims Mesabi has yet to respond to the notices.

Cliffs is asking the court to side in its favor and rule that the permit to mine be modified to exclude the property Cliffs owns.

Adelle Whitefoot

Adelle Whitefoot is a Michigan native who moved to Minnesota in Sept. 2014 when she started as a reporter for the Lake County News-Chronicle. She graduated from Northern Michigan University in Marquette, Mich., in 2012 with a bachelor's in English writing and has been a professional photographer since 2011. Whitefoot is the night general assignments reporter for the Duluth News Tribune. 

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