Update About Essar's Efforts in Nashwauk

Updated: June 05, 2019 06:24 PM

After many starts and stops and ups and downs, the Mesabi Metallics project is poised to move forward with new partners. But they are waiting for the state to respond to their request for an extension on the state mineral leases.


Ron Dicklich, a consultant for Essar, stopped by WDIO on Wednesday to explain. He's confident this is the right mix of companies. Essar filed for bankruptcy in 2016. But now, they would not be the main financial backer. However, they would still be invested, and would be the operator, he explained.

"There's an ore body that needs to be developed. And the money is there now to do it," he said. 

According to a letter from the co-founder of Essar, this is how the proposed partnerships would go. 

1) Fluor would be the engineering and construction firm that would bring the project to completion. Their headquarters are in South Carolina.

2) Mercuria is the Swiss-based global trading corporation interested in being a financial investor.

3) Tenova/HYL, which is based in Mexico and Italy, has the license to the technology for the DRI value-added plant on site.

4) Stelco is the Canadian-based steelmaker who wants pellets and could be an investor.

The group has been pushing for a sit-down with Governor Tim Walz, to go over their commitments. And they want an extension of the state's mineral leases. Right now, if the pellet plant isn't built and running by the end of the year, the leases could get revoked.

"The mineral leases are only good through December 31, 2019. In order for people to spend $800 million dollars, the leases need to be extended," Dicklich said.

A revised construction schedule per Fluor calls for at least 18 months. Dicklich said workers could be on site in four weeks, if there is an extension.

Itasca County leaders have sent a letter to Governor Walz, asking him to use a more flexible approach with Essar. Walz's administration has moved to debar Essar from doing business in the state of Minnesota.

Dicklich acknowledges there is a history here with Essar. But he wants people to move forward. "There are some people who don't like them. But the question remains, at the end of the day, do you want the plant finished? And hiring of 300 people, or do you want to sit around and talk about the past?"

The Iron Range Building Trades approved a resolution to support the new group, because they want to see the project built.

The governor's office deferred comment to the DNR. The DNR told WDIO News that they continue looking at compliance of the leases with Mesabi Metallics. And they are 'very disappointed' that construction has not been ramped up on-site.

As for the Essar debarment, the state continues to pursue this.

Copyright 2019 WDIO-TV LLC, a Hubbard Broadcasting Company. All rights reserved


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