At a young age, we’re often given warnings like “don’t touch; that’s hot!” Unfortunately, we don’t really learn the consequences of touching hot surfaces until we have the experience of being burned. In the case of Essar Steel Minnesota and the repeated failed attempts to develop the rich iron ore resource in Nashwauk, the Iron Range can unequivocally say we have been burned by this company and we should know better than to touch that hot surface again.
I am going on record today with explicit opposition to the state’s ongoing support of Essar and have asked my fellow Iron Rangers to join me in urging the state Executive Council – consisting of the governor, lieutenant governor, attorney general, state auditor and secretary of state – to provide some overdue transparency to this process by thoroughly reviewing Mesabi’s lease requirements prior to the state taking any action. As elected state leaders, the Executive Council is responsible for protecting the interests of Minnesotans, who deserve real oversight over this troubled project.
Essar’s history of burning the Iron Range and state of Minnesota dates back 13 painful years. The project has had many starts and stops and a bankruptcy that caused financial harm to so many Iron Range companies. The region was astonished in 2017 when Essar Steel Minnesota filed a lawsuit against its parent company, Essar Global Fund Limited, and its CEO Madhu Vuppuluri, over allegations the company siphoned millions from the Minnesota project for its ventures across the globe. Months later, it appears obvious that the Department of Natural Resources was deceived again by the project’s third CEO, Tom Clark, when they accepted his story of a customer agreement and financing only to see the whole thing unravel when Clark was fired just days after the state leases were awarded to the failed project.
The company now calls itself Mesabi Metallics, but all indications show Essar continues to be the entity at the helm. In fact, during a recent legislative hearing, the company’s lobbyist told legislators that Essar Global is the parent company of Mesabi Metallics. This raises the question: why did the state of Minnesota enter into another agreement to lease its minerals to Essar after launching an effort to debar the company from doing business in Minnesota? Iron Range legislative delegation members have repeatedly told the governor and DNR that we do not support Essar and have asked the state to terminate its mineral lease agreement so a reputable company can develop the Nashwauk property and bring economic prosperity to the region. Community organizations and the United Steelworkers union have also raised concerns about Essar, but we’re now two weeks from another state-imposed deadline that opens the door for Essar to dupe the DNR into signing over its minerals to a company that has no business mining in Minnesota. Make no mistake, Essar is a bad actor. Public record shows Essar lost its global assets in bankruptcy and yet was able to maintain its grip on the Minnesota project by buying back its own debt. That is the definition of a bad actor.
The management of the Nashwauk minerals has been deplorable and this fiasco shouldn’t have been allowed to reach this point. The DNR has made a series of missteps and I am left with no choice but to go on record to demand a different approach. Further, I will pursue a legislative audit if the department continues to mismanage the state’s Nashwauk leases to the detriment of the people of Minnesota.
To my friends on the Executive Council: please rectify this mess and ensure the Iron Range is not burned again by Essar and its deceptive business methods.
Dave Lislegard is the House
6B State Representative.