Steel Products Prices North America
Iron Ore Operation Magnetation Has Buyer
Written by Sandy Williams
December 10, 2016
Bankrupt iron ore producer Magnetation LLC has a buyer. Tom Clarke owner of ERP Iron Ore has made an offer for the iron ore operation that closed its last plant in October 2016.
Magnetation was a joint venture of Magnetation Inc. and AK Steel. The company recovered waste tailing for conversion into iron ore pellets which were used by AK Steel’s Ohio mills. Magnetation began closing plants in early 2015 and filed for bankruptcy in May last year.
“After 19 months under bankruptcy protection, we are pleased to have reached this important milestone supported by a wide coalition of the stakeholders in this case. This outcome provides the potential for a restart at some point in the future of the state-of-the-art Magnetation assets as a going concern, which has been our goal and would provide the best possible value the estate and its stakeholders,” said Magnetation CEO Larry Lehtinen.
In court documents filed last week, the company said it had received several bids but “have not received a higher or better offer than that presented by ERP.”
The deal includes a $22.7 million payment to bondholders as well as repaying $30 million owed to contractors and vendors. The vendors and contractors will get a partial payment when the company begins operation and then receive the rest over time.
This will be Clarke’s first “foray into iron ore” having owned coal operations in Alabama and West Virginia. The deal would give ERP three Magnetation iron ore pelletizing plants in Minnesota as well as Magnetation’s railroad loading facility in Grand Rapids and its pelletizing plant in Reynolds, Ind.
“What a fantastic environmental sustainability story, to be able to make this high-grade product out of what had been a waste stream,” Clarke said of Magnetation’s technology. “There are piles of waste ore all around the world. We already know this can make a high grade product that makes great steel.”
ERP plants to restart the some of the operations and sell its products to mills in Europe. Eventually, said Clarke, they would find domestic customers as well.
The preliminary agreement between Magnetation and ERP was signed on Dec. 6 and a court hearing will review the proposed sale on Dec. 15.
Sandy Williams
Read more from Sandy WilliamsLatest in Steel Products Prices North America
Nucor slows HRC price climb with $5/ton increase
After eight weeks of double-digit price increases on hot-rolled (HR) coil, Nucor slowed the price rise this week with an increase of $5 per short ton.
Domestic CRC prices surge ahead of imports
The price spread between stateside-produced CR and imports reached its widest margin in over a year.
Evraz raises plate prices $160/ton
Evraz North America (NA) has followed Nucor and SSAB with a plate price increase of its own: up $160 per short ton (st). The increase was effective immediately for all new orders of carbon, high-strength low-alloy, and normalized and quenched-and-tempered plate products, as well as for hot-rolled coil, the steelmaker said in a letter to […]
Nucor lifts HR coil to $820/ton
Nucor has increased its consumer spot price (CSP) for hot-rolled (HR) coil for a fourth consecutive week.
Nucor pushes HR spot price to $790/ton
Nucor increased its consumer spot price (CSP) for hot-rolled (HR) coil to $790 per short ton (st) on Monday, Feb. 10 – a $15/st bump vs. last week. The Charlotte, N.C.-based company has raised its weekly CSP by $40/st over the past three weeks after maintaining tags at $750/st since Nov. 12, according to SMU’s […]