Gov. Mark Dayton has issued a "final offer" for Essar Steel Minnesota to repay nearly $66 million in loans to help build a still uncompleted taconite plant in northeastern Minnesota.

The governor, in a letter sent Wednesday to Essar Steel CEO Madhu Vuppuluri, gave the company a week to accept the terms, which would require payments to begin in early February and be fully repaid by the end of 2020.

Essar Steel said in a statement that it was reviewing the state's proposal and "will respond in due course." Company officials said Essar is "continuing to work diligently in its efforts to keep payments flowing to local contractors and vendors."

Essar owes a half-dozen Minnesota vendors more than $18 million for work.

The state loaned the money to Essar Steel in 2004 as a deal sweetener in hopes that its proposed $1.9 billion iron ore processing plant and steel mill project in Nashwauk would bring hundreds of construction, mining and manufacturing jobs to the region.

It was the first such project in more than four decades and would have been the state's first integrated iron-ore to steel mill operation.

Madhu Vuppuluri, president and CEO of Essar Steel Minnesota, has a week to accept the governor’s newest payment terms.

Essar broke ground seven years ago, but the project came amid one of the worst downturns in the global iron and steel industries and construction moved in fits and starts. Essar ultimately abandoned plans for the steel mill, which was the impetus of the state's $66 million grant to help such infrastructure costs as roads, railroads and utilities.

The loan repayment schedule has been extended several times in recent years, and earlier this month Dayton issued a public ultimatum. The company plans to complete the taconite facility in the second half of 2016. The letter from Dayton's office acknowledged the "importance of the project to the Iron Range," but also underscored that "timely payments are exceedingly important to the state."

According to the letter from Dayton's office, Essar must repay $10 million to the state in two payments — $3.4 million due by Feb. 7 and $6.6 million by March 31.

Essar would then repay the $55.9 million balance in 16 quarterly payments beginning March 31.

Should the company sell its ownership interest in the project, all outstanding debts would be due.

Minnesota Department of Employment and Economic Development officials have said they are still grateful for the 700 construction jobs and the promise of 350 permanent jobs once the taconite plant opens. And the contractors have said they hope to get back to work on the project once they are paid for the work they have already done.

Jackie Crosby • 612-673-7335