DNR Takes $1M from Mesabi Metallics Fund over Alleged Violations

Updated: July 24, 2019 10:38 PM

The Minnesota Department of Natural Resources has taken $1 million from Mesabi Metallics' financial assurance funds over alleged permit violations.

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The DNR announced the move Wednesday, saying Mesabi Metallics has an ongoing permit violation by disrupting the supply of water to Oxhide Creek. The DNR says the company relocated pumps to draw water from a pit at its Nashwauk project site in the summer of 2018 and failed to resume pumping water to Oxhide Creek by a June 23, 2019, deadline.

The pumping into the creek is required to protect stream habitat and downstream uses.

The DNR says it is using the money taken from the fund to pay the state's cost to resume pumping to the creek.  The DNR says it will pursue additional action against Mesabi, if necessary, to enforce the terms of the permits.

Companies are required to establish a financial assurance fund as part of obtaining a permit to mine.  The DNR can take money from the fund if the company fails to meet its obligations, and the company is required to restore money to the fund.

The DNR has told Mesabi Metallics to find another owner/operator, as the state is working to debar Essar from doing business in Minnesota. Essar broke ground in 2008, but then filed for bankruptcy in 2016.

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