Two days after their lease agreement was terminated by the state, Mesabi Metallics filed a lawsuit against the Minnesota Department of Natural Resources arguing that it met all requirements of an amended mineral lease deal.
A press release was sent about the lawsuit late Friday night, but filings included by the company provided no indication when litigation was submitted to Ramsey County district court. DNR officials said the termination was finalized Wednesday and as of Thursday was not aware of any litigation.
A DNR spokesperson was not available for comment. It will be represented by the state’s Attorney General’s office throughout any litigation.
"The DNR's actions in recent weeks demonstrate both a failure to meet the legal standards, but more importantly, a failure to meet a standard of common sense and fair play that all Minnesotans understand,” the company said in a statement announcing the lawsuit. “Should the DNR be allowed to stop construction of the most advanced mine on the Iron Range? Should the DNR walk away from the table when informed that the money would be deposited within three days of the DNR withdrawing the notice of termination?”
Funding for the project has been a particular source of debate around the current lease situation. DNR officials said they did not believe a multi-million dollar lender to Mesabi Metallics credible and noted the funding was contingent on overall price costs that the company would likely need to exceed to finish the half-built project.
DNR Assistant Commissioner Jess Richards went as far as to write the company that he thought funding was “unlikely to ever materialize” and further accused parent company Essar Global of holding $100 million cash hostage unless the amended lease agreement was kept intact.
Mesabi Metallics officials claim in the lawsuit that they met all conditions of the state’s amended lease agreement, mirroring public statements by Essar Global co-founder Ravi Ruia and Mesabi head Larry Sutherland.
Courthouses are closed for the Memorial Day weekend and reopen Tuesday. The DNR said it would take its time in determining the next steps for the leases, which have drawn interest from Cleveland-Cliffs and U.S. Steel, but it’s unclear if a judge will put a hold on any further actions by the state.
A bankruptcy filing by Essar Steel Minnesota in 2016 threw the mineral leases into litigation and they played out as part of the Chapter 11 process for more than a year. The lawsuit route could settle the lease question in shorter order.