Mesabi Metallics Petitions Court for Right to Mine

Updated: September 19, 2018 10:46 PM

Mesabi Metallics said it has taken legal action to protect its right to mine and continue to develop a site in Nashwauk.

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The company said that on Friday, it filed a counterclaim in federal court, to Cleveland-Cliffs' assertion that it has rights to the site. Mesabi Metallics is asking the court to grant them permission to mine and develop the land in which it holds a 50% interest.

Mesabi filed on the same day that Cleveland-Cliffs' CEO, Lourenco Goncalves, was on the Range asserting his company's plans for the Nashwauk site.

Mesabi Metallics said that of the nearly 21,000 acres within the current mine boundary, they own the surface/mineral rights to approximately 14,000 of those acres, and they hold the long-term mineral rights leases on 6,000 acres.

Citing Minnesota statute, the company said if a property owner owns one-half or more of the mineral land, the court must issue an order allowing that owner to mine the land. Mesabi Metallics and Cleveland-Cliffs have 50/50 shares in 1040 acres, or approximately 5 percent of the project acreage, according to the statement.

In addition, Mesabi is also appealing a judge's decision to affirm Cliffs' land acquisition in Nashwauk.

Interim CEO Gary Heasley said in the statement, "Mesabi Metallics remains the only entity that retains a permit to mine as well as permits for air emissions, water appropriation, tailings basin, construction and processing, for the project site," said Gary Heasley, interim Mesabi Metallics CEO. "Mesabi Metallics has made a substantial investment in developing a mine plan and securing all necessary permits, a process that takes many years and costs millions of dollars. Mesabi Metallics remains committed to finishing this project."

Cliffs sent a statement: "Mesabi Metallics' September 14 filing is nothing more than a required response to Cliffs' original action. It was Cliffs that originally filed the Chapter 560 action 7 months ago in Minnesota state court (the venue required by Minnesota law).  Subsequently, Mesabi Metallics demanded that this case be removed to bankruptcy court in Delaware under the guise that it was related to Essar Minnesota's bankruptcy. Mesabi Metallics has taken multiple extensions to even respond to our claims.  Cliffs expects to prevail on this matter related to our estimated 1.1 billion tons of iron ore resources acquired in December 2017.  We look forward to getting this issue resolved so that we can do what Mesabi and its predecessors have failed to do for well over a decade --  develop an economically viable project at the Nashwauk site."

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