The state’s mess gets even bigger

Minnesota Gov. Mark Dayton speaks at a press conference Tuesday about the Mesabi Metallics project in Nashwauk. A day later, the company announced a new investor that could include Essar Global.

Early last week Minnesota Gov. Mark Dayton gathered a group of Iron Range mayors and other local officials to address concerns of the Mesabi Metallics project in Nashwauk and better establish lines of communication with them. Afterward, Dayton, IRRR Commissioner Mark Phillips and State Sen. David Tomassoni expressed their optimism in the new ownership group, saying the state was willing to wait for it to accelerate construction in March — a date they found disappointing at the same time.

Less than 24 hours later, Mercuria Energy announced it was closing in on a deal to invest $650 million in the project by the end of the fourth quarter to take a majority share of it. Its potential minority shareholder: Essar Global — the parent company that spun this project into a tailspin and led it down the more than two-year path to this point.

Dayton is hoping to meet with the Mercuria group next week to discuss its plans and the different roles, especially that of Essar.

Considering the bad taste in the mouths of many on the Range concerning this project and its many woes since regaining state leases, and taking the newfound presence of Essar into account, any response from the state that doesn’t directly and publicly address these new developments and take questions on it, is simply meaningless.

Since July 11, the Mesabi Metallics project has lost about a billion tons of resources in a land decision that favored Cleveland-Cliffs, was subject to an ownership dispute that ousted former CEO and public face Tom Clarke for Nubai Global Investment and now — potentially — has a new company pulling the levers. If Dayton’s response to the news of Mercuria weighs into anything, the governor and state were just as blindsided as the rest of us when Essar’s name popped into a “draft release” from Mercuria.

The thing is, it shouldn’t have surprised anyone, much less the government.

Our reports showed direct connections to Essar and Riverdale Commodities SA, the company Mesabi presented to the state as the offtake pellet agreement holder and $650 million financier of the project to get the leases back. These connections included executives, the company itself and a company director, Raman Jaggi, who is the sole decision maker for an Essar shipping port in Spain.

The state, though not specifically, confirmed it knew of Essar relationships in Riverdale.

On top of that, reports were out as early as September 2017 saying there was an Essar connection to Nubai. Clarke was quick to dismiss this, citing a clause in his contract with Nubai that barred Essar, but a contract is only as good as it’s enforced— and Clarke hasn’t exactly inspired trust on the Range with Mesabi and ERP Iron Ore.

So what made this deal with Mercuria, a legitimate power player in the trading markets, and Essar finally raise concerns? Was it that Essar was so blatantly and irresponsibly mentioned. Did the curtain fell off to reveal who really has been running the show (and it wasn’t the state)?

Or was it finally that the state looked so foolish less than a day after touting Mesabi Metallics and Nubai as the only option when Cliffs is kicking down the door and AreclorMittal inquiring?

Communicating with Range leaders on the updates and progress of the project is a good step — if it happens regularly and in times like these, when answers are critical. But in a time like this, with so much confusion and palpable feelings, it would be best for the governor and the DNR to be more transparent than normal and avoid creating a bigger mess than they already have on hand.

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