Essar Steel Minnesota Loses Mineral Leases, Files for Bankruptcy
07/08/2016 - Essar Steel Minnesota, which had been building Minnesota’s first new taconite facility in years, filed for Chapter 11 bankruptcy on Friday, according to reports.
According to the Duluth News Tribune, the company filed for creditor protection after Minnesota Gov. Mark Dayton refused to postpone a termination of the company’s public mineral leases.
“The company has been told for the past nine months that the state would not extend those leases beyond July 1, 2016, unless it paid the full amounts it owed to Minnesota contractors and showed that it had the ability to carry its current construction project through to completion. The company has not done so, and has provided no reliable assurances that it will be able to do so in the foreseeable future,” Dayton said in a statement posted to his office’s website.
According to the News Tribune, the leases accounted for 44 percent of the land Essar was proposing to mine. The state is now in talks with iron ore miner Cliffs Natural Resources about taking on the project, the News Tribune said.
Minnesota Rep. Tom Anzelc, who is chairman of state legislature's Iron Range delegation, told the Minneapolis Star Tribune that the hope indeed is that Cliffs will take on the leases and bring the project to completion.
However, it remains to be seen how the bankruptcy court will deal with Essar Minnesota’s bondholders and creditors as well as its buildings and equipment at the project site, the newspaper reported.
“The company has been told for the past nine months that the state would not extend those leases beyond July 1, 2016, unless it paid the full amounts it owed to Minnesota contractors and showed that it had the ability to carry its current construction project through to completion. The company has not done so, and has provided no reliable assurances that it will be able to do so in the foreseeable future,” Dayton said in a statement posted to his office’s website.
According to the News Tribune, the leases accounted for 44 percent of the land Essar was proposing to mine. The state is now in talks with iron ore miner Cliffs Natural Resources about taking on the project, the News Tribune said.
Minnesota Rep. Tom Anzelc, who is chairman of state legislature's Iron Range delegation, told the Minneapolis Star Tribune that the hope indeed is that Cliffs will take on the leases and bring the project to completion.
However, it remains to be seen how the bankruptcy court will deal with Essar Minnesota’s bondholders and creditors as well as its buildings and equipment at the project site, the newspaper reported.
