Judge sides with Cliffs in mineral rights struggle
A federal bankruptcy judge ruled Monday that Glacier Park Iron Ore Properties had the right to sell its mineral rights at the Mesabi Metallics Nashwauk mine to Cleveland-Cliffs last year.
Last year, Glacier Park sold those mineral leases to Cliffs after Mesabi Metallics, which is trying to revive the former Essar Steel Minnesota site, failed to buy the leases by an Oct. 31 deadline. But Mesabi Metallics argued that deadline was superseded by the larger bankruptcy agreement which wasn't settled until late December.
Judge Brendan Shannon of the U.S. Bankruptcy Court in Delaware sided with Glacier Park and Cliffs in an opinion filed Monday.
"The Agreement plainly required Mesabi to go effective with the Plan by October 31, 2017 for the Leases to be assumed," Shannon wrote. "It did not, and its failure to do so is fatal to its ability to assume the leases."
In August 2017, Glacier Park and Chippewa Capital Partners, Mesabi Metallics' parent company, entered into a settlement agreement that, if effective by Oct. 31, would have led to Chippewa assuming those leases, which Glacier Park held since Essar Steel Minnesota went bankrupt and left the project partially built in 2016.
When the deadline passed, the two entered another settlement agreement in December 2017, which took effect at the end of that month.
Chippewa owner Tom Clarke told the News Tribune Monday that the company expected the leases to be part of that second negotiation.
"We interpreted it differently," Clarke said. "We interpreted that we had options and one of them was to extend the October 31 deadline."
Clarke said no decision had been made regarding whether to appeal Monday's decision.
"The judge made a mistake and ruled in their favor," Clarke said.
Competing plans for site
Clarke has maintained throughout the case that even without those leases, he'll still be able to finish a taconite mine, processing center and pig-iron plant at the site.
"We're not leaving this project," Clarke said. "We made a promise to the people of Minnesota."
Earlier this month, Chippewa earned back key mineral leases at the site from the state and, after securing financing, are allowed to proceed with construction at the site.
But now, with a complicated quilt of ownership throughout the Nashwauk site, Cliffs announced Monday that they wanted to build something there too.
"With that, Cliffs expects to be able to utilize the acquired real estate interests to implement a financially sustainable plan for the site," Cliffs said in a press release Monday afternoon.
Questions by the News Tribune on what a those plans might look like were not answered Monday.