Mercuria Energy to Invest in Mesabi Metallics

Updated: September 12, 2018 07:38 PM

Another big development for Mesabi Metallics, the unfinished mining project in Nashwauk. On Wednesday, Mercuria Energy announced it plans on "backing the re-emergency of Mesabi Metallics."

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The Switzerland-based energy and commodities group said it has signed a Memorandum of Understanding (MOU) with Chippewa Capital Partners. 

The transaction, according to a Mercuria press release, would allow Mercuria to acquire a majority stake in the iron ore producer. This backing is expected to lead to an acceleration of the engineering, procurement, and construction of the Mesabi Project, according to the release.

An online article on Market Screener's website said that Essar will be a minority stakeholder. Essar was the company that broke ground on the project in 2008, but then filed for bankruptcy in 2016.

A Mercuria spokesman said that Essar presence is part of the history of the project. He added, "With over a billion dollars of project cost funded and still guaranteed, their participation is in fact legacy that every investor needs to address in this process."

This comes just a day after Governor Mark Dayton met with the interim CEO of Mesabi Metallics, Gary Heasley, and leaders from across the Range. Dayton's office said they had received an email that morning about the potential investment by Mercuria. But when he met with Heasley, no new information was available.

Dayton's office said Wednesday: "We have reached out to the new majority investor, Mercuria, to clarify their involvement and that of any other party, including Essar. These changing developments and the lack of prior notice about them are very concerning, and the Governor will express those concerns, when he makes contact with the Mercuria principals."

The update from Heasley was that engineering work would proceed through the end of the year, with a ramp up of construction in March.

Mercuria expects to complete its investment into Mesabi in the 4th quarter of this year.

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