ST. PAUL, Minn. (AP) - Minnesota leaders have approved a lease agreement with a company that intends to complete construction on a pellet plant and another facility to produce high-grade iron ore.
The governor, attorney general, secretary of state and state auditor approved the agreement Monday with Chippewa Capital Partners, Minnesota Public Radio (https://bit.ly/2sSl7KY ) reported.
The deal gives the Virginia-based company and its investors until August 31 to secure at least $850 million in financing. The state could cash in a $4 million line of credit if the company defaults.
The Department of Natural Resources negotiated the lease. Department commissioner Tom Landwehr said the projects will provide short-term opportunities for construction workers and long-term promise in what will be produced once it’s up and running.
“We believe this is a very proactive and positive outcome for the state of Minnesota. We will get the ore deposit developed,” Landwehr said. “We will get good royalty payments. We will get some assurance about an additional taconite plant as well as an additional value-added iron product plant.”
Work on the pellet processing plant in Nashwauk must begin before October and finish by December 2019. Construction on a separate production facility on the Iron Range would begin in 2018 and end by 2022.
The deal revitalizes a project that stopped when Essar Steel Minnesota went bankrupt in 2016. Essar Steel broke ground on a new taconite mine and pellet plant in 2008. But the India-based company struggled to raise the nearly $2 billion needed to build the facility, and construction stalled multiple times until the company declared bankruptcy.
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Information from: Minnesota Public Radio News, https://www.mprnews.org
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