US based iron ore producer Mesabi Metallics, owned by India based Essar Group, has produced its first iron ore concentrate at its new mine and pellet plant in Nashwauk, Minnesota. This is the first new iron ore mine and pellet plant to start up in the US in 50 years. The company marked the milestone at a blast event at the site on September 17, which dislodged an estimated 1.3 million tons of ore.
The concentrate must still be pelletized and fired before it becomes a final product. According to what the company shared through local media outlets, all concentrators will be operational in October, with pellet production to follow shortly after. The operation is expected to produce up to seven million tons per year of direct reduction (DR) grade iron ore pellets, used as feedstock for direct reduced iron (DRI) in electric arc furnace (EAF) steelmaking.
The Export-Import Bank of the United States (EXIM) has provided a $770 million loan to the project. According to Mesabi Metallics chief executive officer Joe Broking, the loan completes the project's $2.5 billion in funding. US Representative Pete Stauber stated that EXIM will issue up to $10 billion in financing for the expansion of Mesabi Metallics.
Media sources reported that on September 15, Broking told the Itasca County Board that the company plans a $5 billion next phase of investment, which would raise the project's total cost to $7.5 billion and create 500 new jobs. Of that amount, $3.1 billion would expand pellet production capacity from seven million tons to 18 million tons per year, while $1.9 billion would go to building a DRI plant. The company plans to file permit applications for the expansion with the state by the end of the year, though Broking said the timeline could slip into January.
Mesabi Metallics is also evaluating locations outside Minnesota for downstream facilities, and currently has about 20 jobs posted for a proposed DRI and steel plant in Paducah, Kentucky.
According to the EXIM release, the company currently employs more than 200 people and expects to employ approximately 350 more once the mine and plant reach full capacity. More than 1,500 construction contractors are on site.
Broking also called for the return of mineral leases covering 2,600 acres that the Minnesota Department of Natural Resources (DNR) revoked from the company in 2021 and transferred to Cleveland-Cliffs in 2023. Without those leases, the mine has an estimated life of 23 years. Mesabi Metallics has also filed an antitrust lawsuit against Cleveland-Cliffs seeking more than $5 billion in damages, with a jury trial scheduled for May 2027.
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