The fate of the assets of some of the former Magnetation operations were decided in Minnesota Bankruptcy Court on Monday.
Magnetation was a company in rapid growth mode from 2008 to 2015, when plummeting iron ore prices forced the mining firm into bankruptcy. Its assets were acquired by ERP Iron Ore, led by Tom Clarke, in 2017. Soon after, however, those assets were once again in the hands of the bankruptcy court.
Several firms submitted bids to the Minnesota Bankruptcy Court – each with a different vision of what should become of the multi-million mining operation equipment and assets of the once-thriving company that reclaimed iron ore from existing tailings basins. Two companies – Prairie River Minerals and MJM Minerals were successful in their bids. The other two – Bison Minerals and Buckeye Minerals were not.
According to court documents, the following is a breakdown of the bids submitted for court consideration:
• Prairie River Minerals, LLC - is a locally based company. Stakeholders include former state Rep. Tom Anzelc, Ed Shaughnessy, Johann Grobler, Jim Swearingen and Scott Conley. Prairie River Minerals successfully bid $1.95 million for Plant 1, located near Keewatin, and the Jesse Load Out Facility. Prairie River intends to use a process known as ultra-dense media separation to extract hematite from old mining stockpiles.
• MJM Minerals – Submitted a successful bid of $1.7 million for Plant 2, located near Bovey/Taconite. Although little information was available about the company’s plan as of press time, it is believed MJM intends to scrap the plant.
• Bison Minerals, LLC – With offices in Coleraine, Minn., Bison also planned to use established technology from South African firms to mine the tailings basins along the West Range. Bison submitted two alternative bids for Magnetation’s assets – a $4 million bid for Plants 1, 2 and the Jesse Load Out and a $21 million bid which also includes Plant 4, located near Grand Rapids. The bid for all Magnetation’s assets included an initial payment of $5 million with the $16 million balance to be paid off in a period of 48 months or less. Bison is led by former South African mining executive Hank Venter.
Although disqualified as a bidder, company spokesperson, Mike Andrews, said Bison has filed an objection to the disqualification, claiming that the company did meet the court’s financial requirements as of June 7 when bids were due.
• Buckeye Minerals, LLC – Buckeye is a newly formed company legally organized in Delaware just last month. Buckeye offered $7 million for Plants 1, 2, and 4 as well as the Jesse Load Out facility. This company's plan for the assets are unknown but they were an unsuccessful bidder.
The assets of Plant 4 in Grand Rapids remain in limbo as of Monday’s auction. The sale of Plant 4 could prove more problematic than that of the other facilities due to the large number of mechanics liens on the facility. However, court documents filed June 10 suggest that another motion for sale could be filed on or before June 28.
The outcomes of Monday’s auction will go to a bankruptcy court judge on Friday, June 19 for a final motion. Sales would take 30 days after that date to close.