Mn Court of Appeals says DNR had authority to terminate mineral leases

A legal victory for the Minnesota DNR. The Minnesota Court of Appeals has ruled that a lower court’s decision about the agency’s actions surrounding mineral leases should stand.

The DNR had terminated Mesabi Metallics’ mineral leases back in May of 2021, after the company failed to fulfill obligations in a lease.

The company sued, and the issue got tied up in court.

Mesabi is the partially built mine and pellet plant in Nashwauk. They sent out a statement, saying, in part, that they respect the decision of the Court off Appeals.

“As we have only received the judgment, we will be reviewing the determination and discussing the same with our legal advisers, including a possible appeal to the Minnesota Supreme Court,” says Larry Sutherland, President & COO of Mesabi Metallics.

“Notwithstanding today’s developments, Mesabi Metallics remains absolutely committed to the Nashwauk mine and pellet facility,” Sutherland adds.

Sutherland points out that, while DNR leases constitute 39 percent of the total minerals within Mesabi Metallics’ mineral resources, the company owns or effectively leases the remaining 61 percent of mineral resources that form part of the Nashwauk pellet plant project. This is in addition to more than 16,000 acres Mesabi Metallics owns, inclusive of a tailings basin, within the project boundary.

“This is why we have been working in recent months to engage local contractors, with a target to let the key construction contracts in late 2022,” Sutherland says. Alongside this activity, Mesabi has engaged with Jefferies and BMO Capital Markets to raise additional financing to complete the project.

Representative Dave Lislegard sent out a statement, which reads:

“Today’s ruling validates the truth we all knew about a company that over and over again failed northern Minnesota. Instead of creating new jobs and economic opportunities, all the Essar Steel and Mesabi Metallics debacles brought to our region were years of broken promises, unnecessary litigation, false starts, and false hope. Thankfully, the time of disappointment appears to be over and we can soon turn to a new chapter. It’s now imperative that the state of Minnesota work with a proven and trusted company that has demonstrated a commitment to our region – through its actions, not words. I believe there is only one viable company that will utilize the state mineral resources near Nashwauk to the benefit of our mining region.”