Governor Mark Dayton has terminated Essar Steel Minnesota’s mineral leases and turned his attention to Cliff Natural Resources to act as a developer for the Nashwauk site.
On Friday Dayton said in a statement that Essar Steel hasn’t demonstrated or showed any signs that it will repay the $66 million infrastructure charges to the state, finish its plan for the iron ore facility in Nashwauk and pay its contractors.
“Essar Steel has been told following the past nine months that those leases won’t be extended beyond July 1, 2016, by the state unless it pays the full amount it owed to the Minnesota contractors and show that it has the ability to successfully carry out its current construction project to completion,” Gov. Dayton said.
“The company has failed to do so, and hasn’t provided reliable assurances that it can do so in the future.” He added.
In 2008, the company broke ground promising to build a $1.8 billion mine, steel mill and iron ore processing plant that would reach completion in 2011. However, the project has faltered due to significant financial issues and the collapse of the global steel market.
Commissioner for Department of Natural Resources Tom Landwehr says that the state received notification on Friday noon that Essar Steel has filed for bankruptcy. According to the reports Essar Steel owes its vendors the sum of $74 million.
Gov. Dayton went on to say that he has met with Lourenco Goncalves Cliffs Natural Resources CEO, who has expressed a strong interest in the development of the site. According to Dayton he and Goncalves will hold another meeting on Tuesday in the Iron Range to discuss what the company plans.
Essar Steel is owned by the Essar Global Fund Ltd., a company based in Mumbai, India. Essar Steel’s project had initially brought hope for thousands of jobs and some hundred permanent jobs on the project.