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DNR's Full Statement on Nashwauk Mining Project

DNR's Full Statement on Nashwauk Mining Project

Created: June 06, 2019 06:02 PM

Barb Naramore, Deputy DNR Commissioner, provided the following statement about developments regarding the mining project in Nashwauk:

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The DNR continues to work actively to bring the Nashwauk project to a successful completion.  We recognize the importance of this project to the state and local communities, and want to provide some information about the current situation.  Essar’s consultant publicly stated that the only thing they need to start construction at Nashwauk is an extension of the pellet plant construction deadline from the state.  The state does not share this perspective.

First and foremost, Essar does not hold either the permits or leases for the Nashwauk project.  Mesabi Metallics does.  The DNR is seeking to debar Essar based on the company’s egregious past violations of its contractual obligations.

The DNR has received a handful of letters from the companies Essar now cites as partners, but these are not indicative of a substantive consortium or plan.  There are no commitments in these letters, only expressions of interest.  It is not surprising that a steel company would want to buy pellets, nor that a construction company would want to build a plant.  Many other entities have also expressed interest in the project over time, and there is nothing particularly distinctive or compelling about the interest expressed in these letters.

If Mesabi Metallics or Essar truly has the funds to ramp up construction, it is simply shocking, and beyond disappointing, that they have not done so already.  The DNR reached lease terms with Mesabi Metallics in June 2017, providing more than sufficient opportunity for the company to recommence meaningful construction and meet its obligations under its leases.

For the DNR to even consider an extension to the lease deadlines, we first need to be working with a credible owner and operator capable of completing the project.  

For all the reasons laid out in our debarment action, Essar has absolutely no credibility with the DNR.  This cannot be overstated.

We strongly advise Mesabi Metallics to position itself as or with a credible controlling owner and operator, capable of securing the necessary construction funding, before it is too late.

The DNR has and will consider all viable proposals to bring the Nashwauk project to operation.  We are fully committed to development of this outstanding ore body and the economic opportunities that will bring to the Iron Range.  If a credible owner/operator emerges, then the DNR will be available to discuss timelines under the leases to ensure the success of the project.


 

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