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Court Dismisses Lawsuit Against Essar Steel Algoma
12/04/2015 - A U.S. federal court has dismissed an iron producer’s lawsuit against Essar Steel Algoma, the company has announced.
Cliffs Natural Resources filed suit against the Canadian steelmaker in January 2015, arguing that the company had breached its long-term taconite supply contract. Cliffs sought US$90 million in damages; Essar Steel filed countersued and sought claims against Cliffs in excess of US$164 million.
In October, Cliffs announced it was canceling the agreement. Essar Steel Algoma later filed for creditor protection under Canada’s Companies’ Creditors Arrangement Act.
In a statement, Essar Steel Algoma CEO Kalyan Ghosh said the company is pleased with the ruling.
“We believe the issues between Cliffs and the Company can be effectively addressed in conjunction with the CCAA proceeding and, if required, the (U.S. Chapter 15 proceedings). The Ohio court's action appears consistent with this belief."
The ruling was dismissed without prejudice, the company said.
On another front, Essar Steel Minnesota, which is building a new taconite facility in Minnesota, has paid out US$20 million in past due bills from contractors.
Earlier in the week, Minnesota Gov. Mark Dayton threated to call due a US$67 million loan that state had given the company to help it build infrastructure at the site.
According to the Minneapolis Star Tribune, several contractors had said they were not being paid, and some pulled an estimated 200 to 300 workers from the job site.
In a statement, the governor’s office said Essar Steel has informed the state that representatives of an international bank are on the construction site, performing due diligence, "with the aim of providing additional capital to bring current all additional outstanding obligations to Essar’s vendors by the end of the month."
"That additional capital would also help assure the completion of the project, with timely payment of its contractors and vendors moving forward," the statement said.
Construction on the project began in 2008, but has progressed in fits and starts. The project originally was to have included an integrated steel mill, but Essar shelved those plans, the newspaper said.
In October, Cliffs announced it was canceling the agreement. Essar Steel Algoma later filed for creditor protection under Canada’s Companies’ Creditors Arrangement Act.
In a statement, Essar Steel Algoma CEO Kalyan Ghosh said the company is pleased with the ruling.
“We believe the issues between Cliffs and the Company can be effectively addressed in conjunction with the CCAA proceeding and, if required, the (U.S. Chapter 15 proceedings). The Ohio court's action appears consistent with this belief."
The ruling was dismissed without prejudice, the company said.
On another front, Essar Steel Minnesota, which is building a new taconite facility in Minnesota, has paid out US$20 million in past due bills from contractors.
Earlier in the week, Minnesota Gov. Mark Dayton threated to call due a US$67 million loan that state had given the company to help it build infrastructure at the site.
According to the Minneapolis Star Tribune, several contractors had said they were not being paid, and some pulled an estimated 200 to 300 workers from the job site.
In a statement, the governor’s office said Essar Steel has informed the state that representatives of an international bank are on the construction site, performing due diligence, "with the aim of providing additional capital to bring current all additional outstanding obligations to Essar’s vendors by the end of the month."
"That additional capital would also help assure the completion of the project, with timely payment of its contractors and vendors moving forward," the statement said.
Construction on the project began in 2008, but has progressed in fits and starts. The project originally was to have included an integrated steel mill, but Essar shelved those plans, the newspaper said.
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