The $215 million Mesabi Nugget project in Hoyt Lakes, Minnesota has been abandoned, as the project's major investors have backed out.
Cleveland-Cliffs Inc., a partner in the project, said Friday night that the project has been suspended indefinitely because all the partners were not able to come to terms. Steel Dynamics was the other major partner in the project.
“Though we are disappointed with the temporary setback that this action represents, the iron nugget technology works and we intend to move forward,” Cliffs Chief Executive Officer Joseph Carrabba said.
Officials had hoped Mesabi Nugget would become the world's first commercial iron nugget plant, bringing 100 new permanent jobs to the Iron Range community.
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Japan's Kobe Steel also announced they intend to proceed with development of a commercial-scale reduced iron plant at Cliffs' Northshore Mining facility in Silver Bay. However, sources say that permits for the Silver Bay will be harder to obtain.
The state of Minnesota had supported the Hoyt Lakes site financially and legally, helping to obtain special tax and environmental legislation to pave the way for the project. The Minnesota state government along with Iron Range Resources had also fronted and loaned over $42 million for the project.
Hoyt Lakes Mayor Marlene Pospeck qualified Cliffs' and Kobe Steel's decision to pull out from the project as "reprehensible and infuriating."
Minnesota Senator Tom Bakk told the press, "Everything was ready. The Iron Range legislators pulled out all the stops in St. Paul for this. We broke arms and broke legs to make it happen."
The Hoyt Lakes site had been expected to be up and running in April 2008.