Ahead of Nashwauk, Cliffs plans to reopen Mich. mine

In this Oct. 3, 2018 file photo, Cleveland-Cliffs President and CEO Lourenco Goncalves chats with then-gubernatorial candidate Tim Walz during a tour of the United Taconite plant in Forbes.

VIRGINIA — Minnesota Gov. Tim Walz said the state is closely monitoring progress at the Nashwauk taconite plant and expects their evaluation of critical mineral leases to become more clear in the coming month.

In an interview at the Mesabi Daily News office, Walz said frustration over the lack of progress made by Mesabi Metallics since it secured the state-owned mineral leases in July led him to direct the Department of Natural Resources to take a hard look at what’s happening and what the state can do.

The lease review, coupled with the DNR’s effort to ban Essar Global from doing business in Minnesota, represent a tougher stance from the new governor toward a project that has stopped and stalled since 2008, ultimately falling into bankruptcy in 2016 under Essar.

Walz said if Mesabi Metallics can’t meet the obligations required by the state to maintain the leases, his administration will look at other options to kickstart the project.

“There’s nothing happening there,” Walz said. “... I think in the near future we’ll see some clarity.” The governor later added: "There’s some deadlines at the end of the month that they need to meet.”

Cleveland-Cliffs CEO Lourenco Goncalves further expressed his desire for the state to transfer the leases to Cliffs at a state of the company address Tuesday in Chisholm. Cliffs has long-sought control of the project and now owns a large share of the private land and minerals at the Nashwauk site.

Pointing to a Cliffs-owned hot-briquetted iron facility in Ohio that’s expected to operate in 2020, Goncalves said he will follow through with supplying ore to Hibbing Taconite and building the company’s second HBI plant in Nashwauk if he’s awarded the leases.

The state has two options if it pulls the leases from Mesabi Metallics, according to the DNR. One is a competitive bid process that exposes the leases to a broader set of parties. The other is negotiating the leases with an entity.

As an adjacent landowner at the project site, Cliffs is eligible under Minnesota Statute 93.1925 to apply for the leases through the DNR commissioner, who with approval of the state Executive Council, can negotiate if “the best interests of the state will be served.”

Walz said the state is following the process in order and hasn’t reached a point of discussing the leases with Cliffs or another outside party, but added he’s well-aware of the company’s position and intentions.

Goncalves and the governor haven’t spoken directly about the project.

“Mostly through public statements, which is the way to go,” Walz said. “I would expect nothing less of him to advocate for it.”

Mesabi Metallics and Essar Global have separately said they won’t make the December 2019 deadline to finish the pellet plant as outlined in a lease agreement with the state. Mesabi Metallics has previously stated it would ramp up construction in March.

The governor and DNR haven’t provided an exact timeline for the lease review to yield any action.

“Our goal was to follow the process and if it appears they don’t have the capacity or desire to try and move on that … we need to, in the best interest of Minnesota, use those [leases],” Walz said. “It’s my intention that we don’t stay in the place we’ve been, where we’re just in limbo here and nothing is happening.”

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