The mine and processing plant partially developed by Essar Steel Minnesota LLC (ESML) emerged from bankruptcy Tuesday following court acceptance of a business reorganization plan. Chippewa Capital Partners LLC compiled the plan that was accepted by Judge Brendan Shannon. 

The Minnesota Department of Natural Resources (DNR) was one of the last entities to drop its objection, although the decision is subject to review by the Minnesota Executive Council. In April, the DNR called an earlier version of the reorganization plan “speculative at best and visionary at worst.” State officials revised their position after meeting with executives of Chippewa Capital Partners, the firm that will inherit the mineral leasing rights and take over ESML’s remaining assets in Nashwauk.

“Their bid is certainly stronger than previous bids made by other potential investors, and provides more promise of being able to put Minnesota contractors back to work and complete the project,” Gov. Mark Dayton’s Assistant Chief of Staff Matt Swenson said in an e-mail to BusinessNorth. “Chippewa has made a strong commitment to not only complete the pellet plant, but also to build a value-added facility, which has always been a priority of the State of Minnesota.”

Chippewa Capital Partners, led by Commonwealth of Virginia businessman Tom Clarke, assembled a consortium of companies to bring sufficient resources to the table. They include Liberty House, which is affiliated with Great Britain-based GFG Alliance. Chippewa Capital Partners also is affiliated with ERP Iron, which recently obtained Magnetation through similar reorganization proceedings. Clarke also acquired metallurgical coal mines during a market bottom, securing a key ingredient needed to manufacture steel.

Chippewa’s plan is to produce both taconite and iron nuggets, as ESML initially proposed but later scaled back to only a pellet operation. If successful, the alliance and its affiliates could become an integrated mining and steelmaking firm.