August 30, 2017 06:18 PM
We'll have to wait a little longer to find out the final financing plans for the former Essar project.
Chippewa Capital Partners, Mesabi Metallics and state and local governments have agreed to a 30-day extension.
A statement from Mesabi Metallics reads: "The parties have agreed to a 30-day extension. Mesabi Metallics will continue to work closely with Chippewa, the State and Itasca County to close the required financing and complete the project."
Earlier this year, in a court-approved reorganization plan, Chippewa agreed to line up all the financing by August 31 or the state mineral leases would revert back to the state.
However, Mesabi Metallics and Itasca County confirmed that the deadline has been pushed back 30 days.
Itasca County Board Chairman Terry Snyder said they approved a resolution about the extension on Tuesday.
"Two of their major investors, which I believe was a smart business decision, asked to have a more in-depth analysis done by an engineering firm to come up with the actual cost to build and cost to complete the pellet project. They found a firm who did this, and now they have to go back and share those costs with their investors and the bankruptcy court," Snyder explained.
He said that the projected cost has come in at $550 million, which is significantly less than the earlier estimate, which was $850 million.
Snyder added that the extension does not affect the construction timelines. The pellet plant is supposed to be complete by the end of 2019, with production in early 2020.
Clarke has taken control of the Essar project and the former Magnetation assets, through court proceedings.
He's a state of Virginia-based businessman.
Cleveland Cliffs had hoped to get the mineral leases at the Essar site, and even had support of Governor Mark Dayton at one point. CEO Lourenco Goncalves told Eyewitness News on Wednesday that he was not surprised about the extension.
"That's the way Minnesota does business. I don't have time for these things. I've already started construction on an HBI plant in Ohio," he said.
Updated: August 30, 2017 06:18 PM
Created: August 30, 2017 03:10 PM
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