Cleveland-Cliffs Inc. is looking to challenge an arbitration decision that has affirmed Mesabi Metallics’ termination of a lease that Cleveland-Cliffs had held on land near Nashwauk.
As a result of the arbitration, Mesabi Metallics says it now has full ownership and access to an additional significant reserve of unhindered taconite mineral rights in 3,200 acres.
But Cleveland-Cliffs says its considering its options.
“Cleveland-Cliffs strongly disagrees with an arbitral panel’s recent decision on the termination of a portion of our leased land at Nashwauk and we are currently reviewing our options to appeal the decision,” Cleveland-Cliffs said in a statement. “These leases, together with State of Minnesota leases which were awarded to Cliffs in 2023, were to provide a viable option to extend the life of the Hibbing mine. Without these leases, the future of Hibbing would once again be in question. We strongly believe that our appeal, as a matter of law, will be successful.”
It’s another page in an ongoing story of the two company’s efforts to control some of the highest quality ore left on Minnesota’s Iron Range.
Cleveland-Cliffs is seeking to develop new sources of crude ore to supply Hibbing Taconite Co.
In addition to the state mineral leases that it still holds near Nashwauk—formerly held by Mesabi Metallics, but in 2023 awarded to Cleveland-Cliffs by the state—Cleveland-Cliffs had held leases on the property in dispute.
Mesabi Metallics in 2021 acquired ownership of the land in dispute.
The dispute over the land goes back nearly a year.
According to State of Minnesota, County of Itasca Ninth Judicial District Court records, Mesabi Metallics on Aug. 2, 2023, sent a letter to Cliffs notifying Cliffs that it was in default of the lease agreement.
On Oct. 9, 2023, Cliffs received a notice of termination of the lease from Mesabi Metallics, according to the court records.
Mesabi Metallics terminated the lease saying Cliffs was restricting access to the land that Mesabi Metallics owned by erecting barricades, putting up trespass signs, installing gates and making verbal demands to keep Mesabi Metallics off the land, according to the court records.
Mesabi Metallics also said Cliffs had failed to provide Mesabi Metallics with mine plans as required by the lease, according to the court records.
According to the court records, Cliffs countered whether Mesabi Metallics wrongfully terminated the lease by letter dated Oct. 7, 2023, whether Cliffs breached the lease as alleged in Mesabi Metallics’ letters by (a) not providing an annual mine plan or a 30-60-90 mine plan, (b) seeking to restrict Mesabi’s access to the leased property, and (3) whether Mesabi Metallics committed a first breach by, amongst other activities, breaching the obligation of good faith and fair dealing.
Cliffs also asserted that Mesabi Metallics was trespassing because it was trying to use the premises to complete Mesabi’s own mining and pelletization plant, a use that Cliffs claimed was not permitted by the lease which granted Cliffs all of the surface rights to the premises except for Mesabi’s limited right to enter the premises solely for the purposes of inspecting the property and ascertaining its condition, according to the court documents.
However, the recent arbitration award “affirmed its October 2023 termination of a private iron ore mineral lease agreement previously held by Cleveland-Cliffs Minnesota Land Management LLC (Cliffs),” Mesabi Metallics said in a news release.
The arbitration decision validates Mesabi Metallics’ rightful termination of the lease, Mesabi Metallics said in the news release.
“This arbitration decision confirms Mesabi Metallics’ control over multi-decade taconite mineral interests on the Iron Range,” Joe Broking, Mesabi Metallics president and chief executive officer said in the news release.
The arbitration decision “is not related in any way to the iron ore mineral leases awarded to Cliffs by the State of Minnesota that was approved in May 2023, and does not impact rights to mine state taconite leases by Hibbing Taconite Co.,” Mesabi Metallics said in the news release.
Mesabi Metallics says that as a result of the arbitration, the company is one of the largest mineral holders on the Iron Range rather than the largest mineral holder on the Iron Range as stated in an earlier Mesabi Tribune story.
Mesabi Metallics says its stepping up construction on its taconite mining, seven million ton-per year DR-grade pellet production facility near Nashwauk.
“Mesabi has accelerated construction of a 7 million tonne per year DR-grade pellet plant and has received an additional nearly $100 million dollars in equity funding during the last several months,” Broking said.
Mesabi Metallics plans to have the more than $2 billion taconite facility operating in the first quarter of 2026.
During the final 18 months of construction, 600 union workers will work on the project, Broking said.
“During this period, we also expect to conclude the recruitment process to reach 350 full-time, multi-generational jobs for operating the facility,” Broking said.
Broking said the Mesabi Metallics project will enable the long-term success of the region.
“Mesabi Metallics remains committed to working cooperatively with state agencies and other stakeholders to advance our project and support workers and communities across the Iron Range,” Broking said.
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