Essar Steel Minnesota paid its delinquent contractor bills Friday, preventing Governor Mark Dayton from immediately calling due the company’s $66 million state loan.
Dayton’s office said in a statement Friday that state officials “confirmed with the company, its vendors, and its CEO, Madhu Vuppuluri, that Essar Steel Minnesota had paid, in full, $20 million in outstanding obligations to its vendors, meeting the Governor’s Oct. 12 demands.”
The state loan funded power, rail and other infrastructure costs at the $1.9 billion taconite construction project in Nashwauk, Minnesota. However, several contractors claimed they were not being paid.
In a statement, Essar officials said, “We appreciate the work and support of the governor and the state agencies as we here at Essar continue to focus our efforts on this massive project along with the support of contractors to keep construction activities progressing on the project.”
Construction on the plant began in 2008 but slowed down after the global economic crisis the next year. The plant was intended to be the only fully-integrated iron-ore to steel mill operation in the state, but was later downgraded into a taconite only facility.
Essar’s change of plans and missed construction deadlines violated the terms of the state’s loan, prompting state officials to pursue repayment.
Officials from the Minnesota Department of Employment and Economic Development had been negotiating a repayment time table when Dayton issued his ultimatum Monday.