Mesabi Metallics Sues State Over Mineral Lease Termination

ST. PAUL, Minn. (AP) — Mesabi Metallics is suing the state of Minnesota over its iron ore leases which regulators terminated last week.

The state Department of Natural Resources says the company failed to live up to terms of its contract, specifically by having $200 million in land by May 1.

Mesabi Metallics is suing the DNR in Ramsey County District Court for breach of contract and breach of good faith as it attempts to keep its long-delayed mining project in Nashwauk from collapsing, the Star Tribune reported. The DNR declined to comment on the lawsuit.

The mineral leases are critical for the taconite project, which has not been completed.

The largest player in Minnesota’s taconite business, Cleveland-Cliffs, has long sought the leases. Recently, U.S. Steel, the Iron Range’s other heavyweight, has also shown interest in the leases.

Both companies want the leases to supply ore to their existing taconite plants.

The state gave Mesabi Metallics a lease extension in December, providing that the company meet a host of provisions by May 1. Mesabi had only $100 million of the $200 million the state demanded, blaming the COVID-19 pandemic for financing delays, an explanation the DNR has rejected.