Updated: May 20, 2021 04:25 PM
Created: May 20, 2021 03:03 PM
The DNR is making it clear that they do not think Mesabi Metallics is meeting the terms of the lease agreement.
In a letter dated Wednesday, which was the same day the company hosted a lunch on-site in Nashwauk, Assistant Commissioner Jess Richards sent a letter to the company.
The letter said the agency hasn't completed the review of all the paperwork, but it has determined that Mesabi and its parent, Essar Global, failed to meet additional conditions.
Back on May 5th, the DNR sent a notice to Mesabi saying they were initiating the process of terminating the mineral leases, based on the missed requirement of having $200 million dollars immediately available in its accounts. There was only $100 million available on the deadline of May 1st.
The letter from the 19th said that the proposed lender identified as Mark AB is 'not a credible lender for the project.'
Also, the letter said the COVID crisis in India is not the reason the full $200 million dollars is in the accounts needed. It said that, '...it was a deliberate choice by Mesabi and Essar Global...'
Richards added that the agency is proceeding with termination of the leases, as set forth in the May 5th notice.
On Wednesday, Larry Sutherland, Mesabi's new president, said the initial $100 million is enough to pay contractors for months, and that the second $100 million will not be utilized for months anyway. "They are ready to put the money in, but we need to know the leases aren't being terminated," he added. They've had preliminary discussions with the DNR.
Mesabi sent a statement on Thursday, which reads:
"Mesabi Metallics LLC disputes the legal claims made by the Department of Natural Resources in its letter dated May 19, 2021. The DNR is now effectively claiming that Mesabi Metallics was required to comply with different terms than those actually provided in the 2020 Master Lease Amendment.
Mesabi Metallics also strongly disputes the mischaracterizations made about Mesabi Metallic's intentions related to the Project. Mesabi Metallics has worked in good faith with the DNR and other parties to move this project forward so that construction can be completed on schedule and will continue to do so.
We believe that continued dialogue would be productive and in the best interests of all stakeholders, including the City of Nashwauk, Itasca County, the taxpayers of Minnesota, and the hundreds of union workers who will be hired to construct and operate the facility. It is unfortunate that the DNR seeks to end negotiations when we are so close to bringing iron mining back to Nashwauk.
Mesabi Metallics remains committed to working with all interested parties, including the DNR, to complete the project."
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