A federal bankruptcy judge in Delaware gave Mesabi Metallics approval to restart some construction on the shuttered Essar Steel taconite project in Nashwauk, Minnesota. The order allows Mesabi Metallics to spend money set aside in bankruptcy court to bring back construction workers on some projects at the massive taconite iron ore mine and processing center. The restart is expected as early as May 2017. It would be the first work on the idled project since late 2015 when India-based Essar Steel walked away after spending $1.6 billion on the incomplete project.
Through its initial filing for continued operation, the company requested for $5 million to be released for construction in order to avoid losing a Minnesota Pollution Control Agency air emissions permit for the project. It could take years for the company to reacquire the permit if cancelled due to lack of project initiation.
Mesabi Metallics has not received definite approval to take over the failed Essar project. Hearings are expected later this month. The bankruptcy judge will also address pending state mineral leases that cover approximately 40 percent of the mine site.
In March, Mesabi Metallics received court permission to enter into labor agreements with potential employees and with labor unions that would finish the project. Mesabi Metallics says it will cost another $800 million to finish the remainder of the project.