Mesabi Metallics ramps up construction at Nashwauk

The ore is there. The infrastructure is there. The buildings are there.

And the funding is there.

Mesabi Metallics is stepping up construction toward completing its $2.3 billion taconite mining and DR-grade pellet production facility near Nashwauk, company officials say.

“We’re currently in the process of ramping up production at the site,” Joe Broking, Mesabi Metallics president and chief executive officer said. “We’re approaching 200 contractors at the site. We’re working on all our facilities including the pellet plant, crushing and concentrator and we are going to continue to ramp up over the next few months.”

Hundreds of more construction workers are expected to be working at the site by summer’s end, Mesabi Metallics officials said.

The massive project for years has been through a series of starts and stops.

However, speeding up construction is a major step forward toward the birth of a new taconite production facility on the Iron Range.

“We’ve spent $90 million since last May,” Rakesh Kankanala, Essar Global Fund managing director of Infrastructure and Strategy for Essar Capital Limited said. “We’ve always been clear that Essar is committed to the project.”

To complete the project, an estimated additional investment of $650 million by Essar Capital will get the project to commercial operation, Kankanala said.

“The capital is committed and the project has been funded,” Kankanala said.

Construction on the pellet plant, crushing facilities, concentrator, and associated structures are occurring simultaneously, Broking said.

It’s expected that the crushers will be the first to be completed followed by the concentrator and pellet plant buildings, Broking said.

All six mills in the concentrator have been installed and three sides of the huge building enclosed.

A fourth wall is being left open for now to allow the the installation of additional equipment, Broking said.

To help move the project forward, a series of permit amendments have been filed with the state, Broking said.

An amended permit to mine, a water appropriations permit amendment and an air permit amendment are needed to adjust the project due to the loss of state mineral leases to Cleveland-Cliffs and a move to utilize private leases under Mesabi Metallics control, Kankanala said.

The first area to be mined would be from the water-filled former Butler Taconite Pit No. 5, Broking said.

Water from the pit is currently being pumped at 4,500 gallons per minute, Broking said.

With increased construction pace at the site, Mesabi Metallics plans to have the facility up and running in the first quarter of 2026, Broking said.

The project would produce seven million tons of DR-grade pellets annually.

“It’s exciting,” Broking said. “It’s a fantastic project. There’s lots of developments happening in the U.S. and abroad to decarbonize the steel industry and we want to be leaders and we will be the leaders in helping the industry decarbonize.”

With completion of the DR-grade pellet facility, Mesabi Metallics in the future could look to construct value-added facilities at the site that would utilize the DR-grade pellets, he said.

“For right now, our focus is to get seven million tons of pellet production,” Broking said. “Then we will take on phase two.”

Broking said DR-grade pellet production fits perfectly with the direction of the steel industry as electric arc furnace steel production continues to capture a larger share of steelmaking.

“We’re building not just a pellet plant and concentrator, but we’re building a DR plant to ultimately serve the electric arc furnace market,” Broking said. “This project is designed to serve that market. There’s going to be ups and downs (in the steel industry), but we feel good. The EAF market is going to grow and we want to be in position to serve that market.”

The project is going up near the site of the former Butler Taconite plant that closed in the mid 1980s.

An arbitration panel recently dismissed a challenge by Cleveland-Cliffs over some Mesabi Metallics-owned properties at the site, Mesabi Metallics said.

Cleveland-Cliffs had held mineral leases on the properties prior to Mesabi Metallics in 2021 acquiring ownership of the properties, according to Mesabi Metallics.

The arbitration dismissal is binding, Mesabi Metallics said.

Cleveland-Cliffs still holds mineral leases on state land near Nashwauk that Mesabi Metallics once held.

The state mineral leases were awarded to Cleveland-Cliffs after the state said Mesabi Metallics failed to meet terms of a 2020 Master Lease Agreement Amendment.

The patchwork of land ownership and mineral leases has left a mishmash of property ownership near Nashwauk.

With enclosure of the buildings at the Mesabi Metallics site, construction will continue through the winter, Broking said.

“The great contractors on the Iron Range have done this before,” Broking said of building in cold weather. “It’s a fantastic development for mining on the Iron Range and we’re excited to open it.”