Dayton to steel company: Pay vendors in full or pay back state loan

Author:
Updated:
Original:

Gov. Mark Dayton has issued a deadline to Essar Steel, which is building a new $1.9 billion taconite plant on Minnesota's Iron Range, to start paying what it owes to Minnesota vendors and contractors or immediately repay a $66 million loan it was granted from the state.

Dayton is giving the company until the end of the day on Wednesday to pay its Minnesota vendors in full, according to a statement released by the governor's office Monday.

Dayton spoke to Madhu Vuppuluri, president and CEO of Essar Steel Minnesota, last week and issued his ultimatum. If the company doesn't get current with its outstanding bills, Dayton said he will call the state’s $66 million loan and demand Essar repay it immediately.

He also said Essar must remain current on its payments to Minnesota vendors going forward or the same threat applies, MPR News reports.

Dayton met with company officials in mid-October to discuss the same issue, and he said Essar promised at that time to pay its vendors by Oct. 31.

"Those assurances were not fulfilled," said Dayton in the news release.

The Star Tribune reports that Essar owes millions of dollars to a number of different contractors, some of whom have pulled their workers from the project because of the late payments.

Essar is building the taconite plant in Nashwauk, and the loan it received from the state paid for infrastructure improvements at the site, according to MPR News.

Essar under scrutiny

Essar’s plant has been in the works for nearly nine years. It was originally meant to be a combination taconite mine and steel plant – the first steel mill on the Iron Range.

But then Essar dropped the steel mill portion of the project, and it's been having trouble finding enough financing to finish the taconite plant, the Star Tribune reports.

Essar Steel is part of the India-based Essar Group, and the Hibbing Daily Tribune wrote last month that the taconite plant is on track for a mid-2016 opening.

Some critics have said that Essar should pay back the public money it received because the scope of the project has changed.

State Rep. Jason Metsa, DFL-Virginia, says he isn’t keen on showing leniency to a foreign-owned company that’s getting incentives from the state for a project that wasn’t completed – while at the same time, they’re building a new plant that puts them in direct competition with local taconite companies.

The taconite industry is in poor shape right now, and employees across the Iron Range have faced layoffs and idling in recent months.

Next Up

Sergio Romo

Twins decline 2021 option on Sergio Romo

The Twins begin a potential overhaul in the bullpen.

high school football

'Scalpel approach' gives MN schools chance to keep playing sports

County infection rates are no longer the only thing that matters.

CJ-AHyggeHoliday-Photo2

With the help of HVAC, Circus Juventas will host its first holiday shows

After months of canceled classes and shows, Circus Juventas is hosting its first ever holiday show, with safety precautions.

Cameron Dantzler

Vikings send Cameron Dantzler to COVID-19/reserve list

Dantzler's placement leaves the Vikings paper-thin at cornerback heading into Green Bay.

peterson fischbach

Elections 2020 preview: 7th Congressional District

Will Collin Peterson hang on for yet another term?

Zimmer and Hunter

Zimmer explains why he called Hunter's neck injury a 'tweak'

The coach also said Dalvin Cook should return from injury this week.

magazines

60 charged in magazine scam that netted $300M

It's being called the largest elder fraud scheme in the country.

Screen Shot 2020-10-28 at 10.30.23 AM

The Star Tribune is shutting down City Pages

The free newspaper was bought by the Star Tribune in 2015.

billy's on grand

Coronavirus: Billy's on Grand will close for winter

The restaurant is among a growing list of eateries to close for the winter months.

Related