Mesabi Metallics has acquired property at its proposed iron ore project near Nashwauk that's been under lease to Cleveland-Cliffs, according to Mesabi Metallics officials.
The company bought 3,200 acres of land from Butlertac Holdings LLC, Mesabi Metallics officials said Tuesday.
“It brings us one step closer to completing and running a facility that will provide more than 350 well-paying operations jobs plus 800 spinoff jobs,” Larry Sutherland, Mesabi Metallics Co. LLC, president and chief executive officer said in a news release.
Butlertac Holdings is a part of Glacier Park Iron Ore Properties, LLC, according to Dale Kurschner, a Mesabi Metallics spokesman.
Glacier Park Iron Ore Properties in 2017 leased 3,200 acres to Cleveland-Cliffs, Inc.
However, Mesabi Metallics now owns the 3,200 acres, Kurschner said.
That means Cleveland-Cliffs is now leasing from Mesabi Metallics, he said.
The acquisition is a major shake-up and power play in the ongoing Nashwauk iron ore project.
Cleveland-Cliffs did not reply to emails for comment.
The land acquired by Mesabi Metallics includes a combination of undivided and whole-fee interests along with mineral and surfaces leases, according to Mesabi Metallics.
All of the land is within the Biwabik Iron Formation in the vicinity of the former Butler Taconite mine corridor in Itasca County, the company said.
“They say the minerals are the quality they need for the facility they're building,” Kurschner said. “It's high quality ore and they say it's really close to the mine. This would feed the mine and facility once it gets going.”
Mesabi Metallics says the land acquisition strengthens its presence on the Iron Range and reaffirms its commitment to finish the iron ore project in Nashwauk.
The project has for years remained unfinished with several stops and starts.
Mesabi Metallics says $1.5 billion and more than three million man hours of work have so far been invested in the project. The project is more than 50 percent complete, the company says.
When complete, a total of $2.5 billion would be invested, according to the company.
But it's been a rocky few months for the project.
In May, the Minnesota Department of Natural Resources (DNR) terminated mineral leases held by Mesabi Metallics on 2,664.45 acres of state land at the site.
Mesabi Metallics failed to meet terms of a December 2020 master lease amendment, the DNR stated.
Mesabi Metallics followed by filing suit against the DNR.
Cleveland-Cliffs sued Essar Global co-founder Ravikant Ruia and Essar Global Fund Limited for libel and slander over a full-age Star Tribune ad.
Even without the state mineral leases, Mesabi Metallics says it plans to finish the project.
Mesabi Metallics plans to build a 7 million-ton-per-year iron ore pellet plant at the site. Construction would create up to 1,000 jobs, according to Mesabi Metallics.
The company also has interest in building a direct-reduced iron or hot-briquetted iron facility at the site.
Butler Taconite, a taconite mine and iron ore pellet plant, operated at the site from 1967 to 1985. After closure, the plant was razed.
Ore at the site is among the highest-quality ore remaining on Minnesota's Iron Range.
Cleveland-Cliffs and United States Steel Corp. have both expressed interest in the mineral leases on state lands.