Virginia billionaire Tom Clarke emerged victorious from bankruptcy court Wednesday when he and his partners were the only group to show up for an auction to buy the former Essar Steel Minnesota in Nashwauk.

Their bid of more than $550 million was accepted, resulting in what could be a new Iron Range force.

The plan is to merge the company, now called Mesabi Metallics, with the Grand Rapids, Minn., and Reynolds, Ind., Magnetation properties that Clarke's group, Chippewa Capital Partners, bought out of bankruptcy on Jan. 30.

Clarke said he plans to finish construction on the half-finished $1.9 billion Essar taconite project in Nashwauk, Minn. The project, which suffered financial woes and stalled construction over 10 years, was eventually scaled back before being shut down in July when Essar filed for bankruptcy with more than $1 billion in unpaid bills.

"The emotion here is unbelievable to me," he said, of the project, during a phone interview. "To see $1 billion just potentially cut up for scrap was mind-boggling. I was like, 'We have to figure out a solution.' "

If all goes as planned, the revived project could bring renewed life, money and jobs back to Nashwauk.

Chippewa Capital plans to finish constructing Essar's taconite pellet plant in 18 to 24 months and expects to also build an advanced direct-reduced-iron (DRI) plant in Nashwauk within 33 months.

The idea is that the iron ore pellets from Nashwauk and ore concentrate from Magnetation's Grand Rapids plants would feed the new DRI plant, which would convert some of the low-grade taconite pellets into a purer brick of iron. Those bricks would then be transported to electric arc furnaces or mini-mills around the country that convert iron ore into steel.

The rest of the taconite pellets from Minnesota would be shipped to the Magnetation plant in Indiana to be processed into purer forms of iron.

Clarke said his Chippewa group is buying a steel mill, so having a rich supply of iron ore will be critical.

Clarke also said that bringing the more advanced DRI technology to Minnesota's Iron Range makes sense. If his team had just pursued a taconite pellet plant, that would have only increased competition for the other taconite pellet plants already struggling on the Iron Range.

He and his partners — steelmaker Liberty House and an undisclosed private equity firm — already have 12 customers lined up in North America and Europe who will buy the iron ore pellets or bricks, he said. About half of the customers will want traditional taconite pellets, while the other half will want the higher-quality DRI bricks.

"It's really a large responsibility. As I heard about the past history of this project, I said: 'Oh boy. I don't want to be the guy who perpetuates promises that go unfulfilled,' " Clarke said. "But today, we are really feeling good about this. We are not doing this alone."

On the way to the bankruptcy auction Wednesday, he said his team kept going over different scenarios about what would happen if the competition bid a certain way.

But previous bidders — such as SPL Advisors group from California, whose CEO is currently running Mesabi Metallics — did not show up for the Delaware bankruptcy hearing, signaling that it dropped out of the bidding. Cliffs Natural Resources, which made a low, $75 million bid and already has taconite operations on the Iron Range, also did not attend.

"We didn't expect that," Clarke said. "But now, we are very fortunate. And I guess we are all saying that now is when the real work begins."

Liberty House's GFG Alliance in London and the private equity firm each agreed to invest $250 million in the Essar project. Clarke's Chippewa entity put up the assets of the old Magnetation operation into the project. Magnetation's book value is about $700 million, but Clarke said he bought it out of bankruptcy in January for roughly $52.5 million.

On Wednesday, the partners signed court documents to start setting aside money for Essar's creditors.

The original Essar Steel Minnesota was owned by Essar Global, based in India. It had promised to build a traditional iron ore processing plant in Nashwauk, like others in the region, and a steel mill, something that was lacking on the Iron Range and in Minnesota.

Eventually, the project was scaled back to just the taconite plant. And because construction on the project stopped in 2015, the state demanded that Essar repay the state for $66 million in infrastructure costs. The state also had a plan to give the mineral rights associated with the project to Cliffs.

A bankruptcy hearing on May 22 will revisit the mineral rights issue. If Clarke and his partners win the rights, as expected by Iron Range officials and some key legislators, the final piece to the puzzle would be in place.

Last summer after months of broken promises and missed payments, Minnesota tried to suspend Essar Steel Minnesota's mineral rights. But right before the order went through, Essar applied for bankruptcy protection that same day.

A bankruptcy judge put off the state's terminated mineral leases and said the court will ultimately decide who gets the right to mine. A spokesman for Gov. Mark Dayton said that the governor is now "reviewing the situation."