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Judge: Essar Minnesota Can Keep Public Mineral Leases -- For Now
11/17/2016 - A federal judge has ruled that the state of Minnesota can’t yet rescind bankrupt Essar Steel Minnesota’s public mineral leases, which now will remain a part of the company’s bankruptcy case at least until February, reports the Duluth News Tribune.
According to the News Tribune, U.S. Bankruptcy Court Judge Brendan Shannon ruled that the leases, which account for a significant portion of the iron ore Essar Minnesota planned to mine, are critical to any sort of a recovery plan for the business.
Essar Minnesota had been building a US$1.9 billion taconite mine and processing plant, but ran out of cash at the beginning of the year and stopped work. It filed for Chapter 11 bankruptcy in July, just as the state was moving to rescind the leases.
Minnesota is looking to give the leases to Cliffs Natural Resources, which is looking take over the project and build a direct reduction plant.
On Tuesday, Cliffs Natural Resources chief executive Lourenco Goncalves said he was not surprised by the decision.
“I was not expecting anything different,” he said, speaking during a Goldman Sachs investors’ conference in New York.
But he said he believes it’s only a matter of time before the project is fully laid to rest and Cliffs takes control of the leases.
“As soon as the squatters get off the land, the land is mine. So I’m just waiting for the eviction,” he said.
Essar Minnesota had been building a US$1.9 billion taconite mine and processing plant, but ran out of cash at the beginning of the year and stopped work. It filed for Chapter 11 bankruptcy in July, just as the state was moving to rescind the leases.
Minnesota is looking to give the leases to Cliffs Natural Resources, which is looking take over the project and build a direct reduction plant.
On Tuesday, Cliffs Natural Resources chief executive Lourenco Goncalves said he was not surprised by the decision.
“I was not expecting anything different,” he said, speaking during a Goldman Sachs investors’ conference in New York.
But he said he believes it’s only a matter of time before the project is fully laid to rest and Cliffs takes control of the leases.
“As soon as the squatters get off the land, the land is mine. So I’m just waiting for the eviction,” he said.
