A Ramsey County judge dismissed a lawsuit filed by Essar Global that sought to stop the state’s debarment effort on the company.
Second Judicial District Judge Robyn Millenacker issued an oral ruling from the bench on May 30 to throw out the lawsuit without prejudice, which barring appeals by Essar, clears the way for the Minnesota Department of Administration to determine if the company should be banned from doing business in the state.
A written order from Millenacker is expected.
The Minnesota Department of Natural Resources moved to debar Essar Global in January after the India-based steel conglomerate announced it was an investor in the Nashwauk pellet plant currently controlled by Mesabi Metallics. Essar was the former owner of the project until a 2016 bankruptcy filing that saw the plant emerge in 2017 under Mesabi.
“The Court made only a preliminary decision regarding where this issue has to be decided and did not address whether the State has the right to debar Essar,” said Essar spokesperson Jon Austin. “ We remain confident that the State does not have the right to debar us and that we will now have the ability to litigate that issue.”
If the Administration Department ultimately debars Essar, it would prevent the company from doing business in the state, but not block it from remaining an investor in a project.
Essar’s current role at Mesabi Metallics is murky at best. As the primary investor of $260 million, it holds a significant stake in the project but has thus far yielded day-to-day management to Mesabi Metallics.
But in recent weeks it’s been Essar laying out a public case how the project can be completed through a development team that includes an engineering firm to complete the pellet plant, a value-added specialist, a potential pellet customer and a major investor to get it over the $800 million hump.
It’s also been Essar asking the state to extend a Dec. 31, 2019 deadline to complete the pellet plant, saying the engineering firm estimates 18 months of work is left.
Mesabi Metallics officials maintain they are separately in communication communication with the DNR about the project and have not requested an extension.
Last week, the DNR issued a letter saying Essar was not a credible partner and said its plan lacked firm commitments, adding the agency was not dropping the debarment effort.
Austin added the court ruling did not impact the company’s perception on the project or its partnerships.
“We — along with hundreds of leaders across the Range and a team of world-class partners — are ready to bring this project to life and on to completion,” he said. “It is regrettable that the state seems to be intent on pursuing another agenda that will not lead to a timely or successful restart of this project."