Essar Steel History of Trouble, Trouble, and More

After paying off about $1.7 billion in several complex debt transactions around the world, India’s Essar Global is back in the picture in the $2 billion iron ore mine and processing site in Nashwauk.

Essar Global is the parent c o mp a n y o f E s s a r S t e e l M innesota, which filed for bankrup tcy in 2016 following a

decade of delays and difficulties with fu nding the Nashwau k project. In 2016, the nation took the u nu sual step of asking Essar Steel to pay back its econom ic-developm ent loans, becau se the company missed many job milestones and owed thousands of dollars. The Nashwauk plant, which could produce countless long-term jobs, still remains only half-built.

In late 2016, a California investment company named SPL Advisors took control of the job and changed the company name to Mesabi Metallics. Virginia entrepreneur Tom Clarke and his Chippewa Capital Partners bought the Essar Steel assets from bankruptcy. Shortly after.

Clarke sold a vast majority share of their company to Nubai Global Management, a company in the British Virgin Islands, but remained on with management responsibilities.

But, by late last summer, Virginia entrepreneur Tom Clarke and his Chippewa Capital Partners were pushed out, and a series of lawsuits were hurled between Clarke and Nubai, with a majority share of the company awarded to Nubai Global Management. Along with fights between Clarke and

Nubai Global Management, the project has also generated other sore spots and prompted more lawsuits. Clarke sued competitor Cleveland Cliffs on its handling of the matter.

Cleveland Cliffs, in turn, sued the DNR, whining that it expected to carry more than the mining permits of the Nashwauk property and adjoining property it afterwards purchased next door. That situation is still making its way.

In September, Nubai and Mesabi officials met with former Gov. Mark Dayton and assured him that they'd complete the Nashwauk project. Mesabi told Dayton that it pledged to spend $400 million on iron ore processing and the mine complex, and had committed $250 million to the project, ensuring it would be substantially completed by December 2019.

Soon after, Nubai and Mesabi introduced a new wrinkle: Swiss trading firm Mercuria Energy would buy a majority stake in the Nashwauk job by the end of 2018. It assured Dayton that Essar would not be among its partners from the Iron Range job, although Mercuria had ties to Essar Global.

But, Mercuria Energy said at the time that Essar nevertheless had monetary obligations tied to this bankruptcy. Mercuria pledged at least $650 million toward the Nashwauk job.

Mesabi Metallics spokesman Darin Broton said this week that he could not comment on if the Mercuria deal has closed and was unsure how the Essar bargain would play out. He had stated in September that Essar would not be a ”decision maker or investor" in the project and explained Mesabi Metallics would still control and operate the project and own a "considerable chunk". assistant commissioner of the Department of Natural Resources (DNR) spearheading the Nashwauk project.

"Mesabi still owns all of the resources," Broton said. State officials said that they look forward to dealing with new owners who would honor their commitments, and stated they are waiting for more information and had more questions than answers.

"What this [Essar debt repayment] may mean for the resolution of remaining bankruptcy issues and for investment at the Nashwauk project remains to be seen," said Barbara Naramore, the "The state mineral rents and the DNR [mining] permits are currently held by Mesabi Metallics and/or Chippewa Capital Partners. Any alterations to the leases or licenses would need to be approved by the DNR. And we've received no such requests involving Essar Global."

Essar’s half-built $2 billion Nashwauk mining and processing facility project