CEO says firm would build “direct- reduced iron” plant; Essar has vowed to fight its ouster in court.
The CEO of Cliffs Natural Resources Inc. says that if his mining company gets control of the newly bankrupt Essar Steel site in Nashwauk, Minn., it would build the first of what could be several “direct-reduced iron” plants — an advancement for Minnesota’s iron ore industry.
Lourenco Goncalves, CEO of Cleveland-based Cliffs, made the remarks Tuesday at a public meeting at the Nashwauk Township Community Center along with Gov. Mark Dayton. Cliffs has talked before about building a direct-reduced iron plant in Minnesota, but Tuesday marked the company’s most detailed comments.
Last week, Dayton terminated Essar Steel Minnesota’s mineral leases after the steelmaker failed to pay $66 million due the state for the company’s long-stalled $1.9 billion taconite mine in Nashwauk. That prompted Essar, an arm of India-based conglomerate Essar Global, to file Chapter 11 bankruptcy in Delaware.
Essar says it’s got a new financing partner to inject $250 million into the project. But the state — tired of Essar’s delays — is throwing in its lot with Cliffs, which wants to take over Essar’s mineral leases.
Cliffs plans to finish the taconite plant that Essar has been building in Nashwauk — but use it only to supply a direct-reduced iron plant. “It will be a pellet plant to feed DRI,” Goncalves said. “It will be the first of a series of DRI [plants].”
Essar’s taconite plant essentially would serve the same steel mills as mines operated by Cliffs and others, potentially adding capacity to an industry already suffering from overcapacity.
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