Cliffs Natural Resources executives asked the Iron Range's legislative delegation this week not to give further aid or extensions to future competitor Essar Steel Minnesota, the India-based company that is building a $1.6 billion taconite plant in the northeast corner of the state.
Cliffs' new CEO, Lourenco Goncalves, met Monday night with Minnesota's eight Iron Range legislators to introduce himself, discuss difficult market conditions and talk about the $65.9 million in grants the state paid to install railroad tracks, wastewater treatment, power and other infrastructure on Essar's massive project.
The Legislature approved the infrastructure grants in 2007. In exchange, Essar promised to build a new taconite plant and an integrated steel mill in Nashwauk by October.
If Essar misses the deadline, it must repay the $65.9 million.
Last month, Essar asked the Legislature for a seven-year extension to complete the steel mill, said Rep. Carly Melin, DFL-Hibbing.
Cliffs wants the Legislature to do nothing, which would force Essar to repay the state.
Goncalves told Melin, delegation chairman Tom Anzelc, DFL-Balsam Township, and other area legislators that any Essar financing extensions from the state would hurt Cliffs and other long-term taconite firms in the state. Cliffs said it is already struggling to stay competitive amid sunken taconite prices and problems caused by illegally dumped steel imports. Any new accommodations for Essar could be unfair, Cliffs officials said.
Essar officials could not be reached for comment.