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State officials want $66M in incentives given for shelved steel mill paid back

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Essar Steel promised Minnesota a steel mill in 2007. To help out, the state kicked in nearly $66 million in incentives to build the infrastructure that was needed, WDIO reports.

But there was no Essar steel mill in Nashwauk on Oct. 1 2015 – as planned. In fact, the company is in the process of building a taconite plant instead.

So state officials want the money back.

The Duluth News Tribune reports Gov. Mark Dayton, state Rep. Jason Metsa (DFL-Virginia), Essar Steel Minnesota CEO Madhu Vuppuluri and other officials met in Eveleth Monday to talk about a potential solution.

According to FOX 21, Essar officials said they're working on responding to a repayment plan proposal, and will have their response ready for state officials within a couple weeks.

Essar Steel is part of the India-based Essar Group, and the Hibbing Daily Tribune wrote this month that the $1.9 billion taconite project that usurped the steel mill is on track for a mid-2016 opening. There are currently 800-plus workers there at this point.

But the taconite industry isn't in great shape right now, and employees across the Iron Range have faced layoffs and idling in recent months.

Metsa, Northland's NewsCenter reports, 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.

Essar Steel put out a statement calling the meeting Monday "productive," adding that they'll be "continuing our discussions towards resolution of the grant reimbursement obligation in the near future,” the Duluth News Tribune reports.

Essar says the taconite mine is expected to create 350 full-time jobs, averaging $85,000 a year in salary, MPR reported.

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