Mesabi Metallics CEO asks to meet with Dayton on leases
The CEO of Mesabi Metallics has asked Gov. Mark Dayton for the chance to meet in person and convince the governor that the new company is the best path forward for the failed Essar Steel Minnesota project in Nashwauk. In a letter to Dayton dated ...
The CEO of Mesabi Metallics has asked Gov. Mark Dayton for the chance to meet in person and convince the governor that the new company is the best path forward for the failed Essar Steel Minnesota project in Nashwauk.
In a letter to Dayton dated Wednesday, Matthew Stock said he wants to meet with the governor to explain how the new company plans to revive the massive taconite iron ore mine and processing project that's been idle more than a year.
Dayton last week issued a press release saying he will not sign off on Mesabi Metallics' plan in federal bankruptcy court to take over the failed Essar project, and he said the state Department of Natural Resources will oppose Mesabi Metallics being awarded valuable state mineral leases under the proposed Nashwauk mine.
Those leases cover about 40 percent of the rich taconite iron ore at the site and are critical to any company moving ahead with the project.
"It appears that your decision may have been based on a misunderstanding of the company's proposed actions and reorganization plan," Stock wrote to Dayton.
"It's unfortunate that you have been unable to meet me so that I can explain more about the company's reorganization," said Stock, who has headed the new company since last summer.
Mesai Metallics officials met with DNR officials in January, but Dayton has declined to meet with Mesabi Metallics in person, even after being urged to do so by Iron Range DFL lawmakers.
Matt Swenson, a spokesman for Dayton, said the governor can't meet with the company because the issue is before a bankruptcy judge.
The project, which has already cost $1.8 billion, sits half-finished. It's estimated to cost another $800 million to complete.
Stock says he has virtually every other major player in the bankruptcy on board, including Minnesota contractors and vendors who are owed millions of dollars by Essar. Mesabi Metallics even has support of local DFL politicians and Iron Range businesspeople.
But Dayton is playing hardball.
Dayton last week said that "Mesabi Metallics again failed to demonstrate any ability to finance the completion of the Essar construction project or to operate it successfully. ... For the past 16 months, Essar/Mesabi Metallics has been unable to show the solid financial commitments, sufficient to complete the project and to repay the Range contractors the money they are owed."
The fledgling company filed a plan in federal bankruptcy court earlier this month, laying out its scenario to restart construction on the half-built project and see it through to production. The plan could be approved as soon as a March 16 bankruptcy court hearing in Delaware.
Mesabi Metallics has asked the bankruptcy judge to award it the state mineral leases even against the state's wishes.
Mesabi Metallics officials say they are working to break free of the debt and damage left behind by Essar Steel Minnesota, and they also are now trying to draw in the former parent company. They have sued the Essar parent company and principals of Essar Global who they say bilked the Minnesota project out of millions of dollars. Essar officials have denied those claims.
Essar's Nashwauk facility was supposed to be employing 350 people by 2014, producing some 7 million tons of taconite iron ore pellets each year, the state's first new major taconite producer in more than 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 but work occurred in fits and starts. As recently as November 2015, Essar appeared poised to finish the project and begin making taconite pellets in 2016. But that promise was dashed last winter when 700 construction workers and most of Essar's own newly hired employees were sent home and Essar Steel Minnesota out of cash.