Governor Tells Essar Steel Minnesota To Pay Up
12/01/2015 - Minnesota Gov. Mark Dayton has threatened to call due a US$67 million loan to Essar Steel Minnesota if the company doesn’t pay past due bills from vendors building the company’s new Nashwauk taconite plant by 2 December.
“We are all fed up with this," Dayton said to the Duluth News Tribune newspaper on Monday, referring to the non-payment of vendors. "I'd rather they sell it to someone who is going to operate it in a responsible way. I told them it is just totally unacceptable, just totally, completely unacceptable."
The company had made an earlier promise to pay all of its Minnesota vendors by 12 October, but "those assurances were not fulfilled," Dayton said in a statement.
Essar Steel Minnesota, part of India’s Essar Group, is building a US$1.9 billion taconite plant in the state, part of a project that also was to have included a new steelmaking operation.
The company broke ground on the project in 2008, but progress has sputtered because of financial problems and it has shelved plans for the steelmaking plant. The company has borrowed heavily to finish the project, according to the Minneapolis Star Tribune newspaper.
The loan was to be put toward infrastructure costs, such as for building roads and laying utility lines. The money was an incentive for Essar to go beyond processing taconite and add value and jobs by actually making iron and steel at the site, the News Tribune reported.
As a result of the late payments, some contractors have pulled workers from the job site and furloughed staff. An estimated 200 workers are affected, Iron Workers Local 512 representative Mike Walters told the Star Tribune.
"There have been layoffs. We have been getting phone calls here. The (vendors) have been holding on to workers for as long as they could. But some couldn't do it anymore," he said.
The company had made an earlier promise to pay all of its Minnesota vendors by 12 October, but "those assurances were not fulfilled," Dayton said in a statement.
Essar Steel Minnesota, part of India’s Essar Group, is building a US$1.9 billion taconite plant in the state, part of a project that also was to have included a new steelmaking operation.
The company broke ground on the project in 2008, but progress has sputtered because of financial problems and it has shelved plans for the steelmaking plant. The company has borrowed heavily to finish the project, according to the Minneapolis Star Tribune newspaper.
The loan was to be put toward infrastructure costs, such as for building roads and laying utility lines. The money was an incentive for Essar to go beyond processing taconite and add value and jobs by actually making iron and steel at the site, the News Tribune reported.
As a result of the late payments, some contractors have pulled workers from the job site and furloughed staff. An estimated 200 workers are affected, Iron Workers Local 512 representative Mike Walters told the Star Tribune.
"There have been layoffs. We have been getting phone calls here. The (vendors) have been holding on to workers for as long as they could. But some couldn't do it anymore," he said.
