Contractors Not Getting Payments from Essar

Updated: 02/26/2014 6:22 PM
Created: 02/26/2014 4:38 PM
By: Renee Passal

Local contractors at the Essar Steel Minnesota are waiting for millions of dollars worth of payments from the company. And for that reason, according to the trade unions, no contractors are working on the site anymore.

Hammerlund Construction recently filed three liens against Essar. In those liens, they allege that $9 million dollars is owed to them for work on concrete, the tailings basin, and mine-stripping. Leaders told us that they were strongly encouraged to file the liens by their financial group.

And they are not alone. According to Representative Tom Anzelc, this has happened before. The Range delegation has urged Essar to pay the contractors. He said they were told in December that the company was going to get up to date on their accounts payable, have full financing by the end of 1Q of 2014, and be making pellets by October of 2015. 

"It would be almost impossible to fulfill those commitments," said Anzelc over the phone. "It's upsetting and disappointing to say the least. $73 million dollars in public tax dollars went into making this project happen," he added. "We need our local guys and gals to be paid."

Dan Kingsley, Area Business Rep. for the Operating Engineers Local 49, said they were told in the fall that work was going to ramp back up at the site this winter. But it hasn't happened.

"From the labor standpoint, we are disappointed.  People are not working, and we had high hopes they would be able to work through the winter. In Northern Minnesota, we don't get that many opportunities to keep a large number of people employed."

Essar said in a statement: "We are working with our contractors on financial matters, and appreciate all they've done for the project. With respect to project financing, substantial progress has been made and several important milestone's recently achieved.  We have reached the very final stage and expect additional funding to be available relatively soon."

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