Iron Range Mines Still in Flux

Prairie River Minerals Acquires Magnetation Plant 1

A federal bankruptcy judge approved the sale of Magnetation’s Plant 1 in Keewatin and the Jessie Load-Out facility to Prairie River Minerals for $1.95 million. The facilities were ruled “free and clear of any and all liens, encumbrances and other interests.”

Prairie River Minerals is a partnership that includes former Minnesota state legislator Tom Anzelc, South African engineer and metallurgist Johann Grobler, retired U.S. Steel manager Scott Conley, retired U.S. Steel Minntac general manager Jim Swearingen, and mining project manager William Shaughnessy.

The new owners plan to process old stockpiles of iron ore into quality lump and sinter fine ore for use in blast furnaces. PRM will use ultra-dense media separation, popular in South Africa, to extract ore from discarded mined material.

“We are seeking to reclaim iron from lean ore stockpiles,” said Anzelc in an interview with iron range writer Aaron Brown in April. “This is previously mined ore, from previously disturbed and discarded hematite. This material had marketable value prior to the passage of the Taconite Amendment in 1964, which ended hematite mining on the western Mesabi.”

Most steel mills use taconite pellets but Anzelc says PRM has customers who are interested in the lump and sinter fine, and the prices, that the company can offer. Anzelc says there is potential for 1 million tons of lump and sinter fine to be recovered. Production is expected to begin in about 18 months and create 90 to 130 jobs in the Iron Range.

Magnetation’s plant 2 has been approved for sale to MJM Minerals and Plant 4 in Grand Rapids is open for bids. Anzelc says PRM hopes to eventually acquire both plants 2 and 4.

Mesabi Metallics Project Stalled

Mesabi Metallics is still trying to fulfill its commitment to build a pellet plant in Nashwauk, but construction is far from completion.

The site was originally owned by Essar Global, which promised Minnesota a pellet plant and steel plant for the region, breaking ground in 2008. Over the next eight years not much materialized at Essar Steel Minnesota except mounting debt and missed construction deadlines, resulting in then-Gov. Mark Dayton pulling Essar’s mineral lease. The company entered bankruptcy in 2016 and Dayton began negotiations with Cliffs Natural Resources.

For a while it looked like Cliffs would come out on the winning end of the leases, but a bankruptcy court awarded Essar Minnesota and the mining rights to Clarke and Chippewa Capital, forming Mesabi Metallics in 2017. Cliffs CEO Lourenco Goncalves contested the sale and shortly afterward bought up land in the Nashwauk area as a source for HBI, thus complicating Mesabi’s plans.

In 2018, Tom Clarke gave majority control of Chippewa Capital to Nubai Global, which replaced Clarke as CEO. Still needing investments, Essar Global re-emerged last year as a shareholder for Mesabi, buying out $260 million of debt.

Essar’s return was met with a cold shoulder from Minnesota. In January, new Gov. Tim Walz banned Essar from operating in the state and encouraged Mesabi to find a new investor.

“This is a company that left the Iron Range in the lurch and caused a lot of pain. I want to do everything I can to keep that from happening again,” said Walz.

Cliffs Still Interested

Cleveland Cliffs’ CEO has not given up on investing in the region despite expansion plans at NorthShore Mining and construction of an HBI plant in Toledo. Goncalves said he would build a hot briquette iron plant in Nashwauk if the state will award Cliffs the Mesabi Metallics mineral rights.

“We own the land, and because we own the land there is no option without Cliffs,” said Goncalves at a March 2019 State of the Business presentation. “No one can kick me out.”

“I have hope that Gov. Walz will fix what was broken by the previous administration. It’s an easy win,” Goncalves said.