Mesabi Metallics, the former Essar Minnesota project that filed for bankruptcy in July 2016, is now under the control of Chippewa Capital Partners. The Chippewa Capital Partners consortium bid won the auction for the equity stakeholder position in bankruptcy court this week. The winning consortium bid includes a Liberty House interest. SPL Advisors and Cliffs Natural Resources had also expressed interest in taking over the project.
According to a court filing, Chippewa's amended plan will reorganize Mesabi Metallics with a $1 billion proposal from a consortium of investors. The proposal includes project completion commitments and provides over $350 million of distributable value to the pending debtors for work already done on the site. In the court filing, Chippewa also indicated that they wish to build three DRI plants in Minnesota, and that they will pay back up to $65 million to the state for Essar-related infrastructure investments.
Chippewa also has control of ERP Iron Ore, formerly owned by Magnetation, and has agreed to join forces with the Essar project.
The confirmation hearing on the reorganization plan and state’s mineral leases are scheduled for May 22. The Minnesota Department of Natural Resources has filed for the leases to be released from the bankruptcy proceedings.