Pay the rent and leave, state tells steel company that never finished $1.9B plant

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Essar Steel can pack up, get out, and pay back rent.

That was the message from Gov. Mark Dayton Friday, after the steel company – which got a $66 million loan years ago to build a still-not-finished taconite plant – again missed a deadline.

The company got in trouble late last year because it hadn't paid some Minnesota contractors for work that had been done. They paid out some $20 million after a threat from Dayton (part, but not all, of what was owed), and later agreed to pay back the full $66 million.

They had to pay back $10 million by the end of March ... and they missed the deadline.

They were also supposed to finish building the plant by July 1, 2016 (which they did not do), and Dayton says he told the company their lease with the state would be canceled at that time unless they paid out everything they owed to contractors.

The governor's office says neither of those happened, so Dayton told the Department of Natural Resources to cancel Essar Steel's leases. (Read the letter explaining it here.)

The governor's office says Essar will also have to pay rent to the state, but that amount wasn't revealed.

The termination of the lease essentially ends a $1.9 billion project that was billed as a "momentous occasion" when work started, with Iron Range residents celebrating the hope and jobs that would come with.

“This is our future,” Nashwauk Mayor Bill Hendricks said in 2008. “Children all across the Range will have opportunity with all the projects that are being set forwards, moving forward.”

https://twitter.com/WSJBankruptcy/status/751489551739215872

Cliffs could take over the space

A mining company might actually take over the space.

The governor's office says Cliffs Natural Resources is in early talks to finish the project and even add a new piece to the facility.

The state says it's negotiating with Cliffs, and there will be an in-depth discussion Tuesday.

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