The bankruptcy court has approved a complicated settlement plan for Chippewa Capital Partners (Chippewa) to take control of Essar Steel Minnesota assets, partially pay off Essar's more than $1 billion debt and restart construction on the Nashwauk taconite iron ore mine that has sat partially built since late 2015. Essar invested approximately $1.8 billion on the site and estimates are presently at $600 million to finish the project.
Chippewa expects to have financing closed and settled by August 1 for the full project. Construction work has already resumed on the project with limited funding approved earlier by the court.
The mineral leases with the state were tentatively resolved after several safeguards were built into an agreement between the state Department of Natural Resources and Chippewa.
Under the agreement, Chippewa, a joint venture of London steel and energy conglomerate GFG Alliance (Liberty House and Simec Group consortium) and a Virginia investor, Tom Clarke, is expected to begin mining and processing ore by late 2019 or early 2020.
Additionally, Clarke, who also purchased most of the bankrupt Magnetation Iron Range mining and processing operations with financing closed in January 2017, is planning to use much of that taconite to produce HBI at a new facility to be built at the Nashwauk site. Clarke created a new company, Minnesota-based Vencer Capital Partners, to finance the iron ore plant. According to an agreement with the state of Minnesota, construction of the facility is to begin by Jan. 1, 2019.
The new entity will most likely pursue a new name, according to Clarke, since neither Chippewa nor Mesabi Metallic have been accepted by the new owners in reference to the former Essar Steel sites.