Steel Products Prices North America
Essar Steel Minnesota Suing Essar Global
Written by Sandy Williams
January 11, 2017
Essar Steel Minnesota is suing Essar Global Group for $1 billion in damages for financial misconduct related to its uncompleted iron ore-facility.
Essar Minnesota alleges that parent company Essar Global Fund failed to provide necessary operating funds and make investments needed to complete the iron ore pellet plant under construction at ESML. The motion also accuses Essar Global of overcharging its subsidiary for materials needed for construction of the plant.
The Wall Street Journal reported that “these alleged actions ‘exacerbated ESML’s cash starved financial position’ and included transferring millions of dollars to affiliated companies not working on construction of the Minnesota mine, for ‘absolutely no value’ in return.”
According to the court filing, “ESML is left with a half-completed iron ore pellet plant that will cost hundreds of millions of dollars more to finish; and ESML is burdened with over a billion dollars in claims asserted against it that are directly attributable to the Essar affiliates’ failures to fulfill their obligations with respect to the project.”
Essar Steel Minnesota entered Chapter 11 reorganization in July 2016 after the governor of Minnesota terminated the company’s mineral leases for failure to pay its debts and complete the pellet plant. Governor Dayton agreed to lease the land to Cliffs Natural Resources. A month earlier, Cliffs Natural Resources negotiated a pellet supply agreement with ArcelorMittal depriving Essar Minnesota of one of its major customers.
ESML filed a motion requesting an investigation of Cliffs for violation of antitrust laws and accused the state of refusing to extend the repayment of grant funds because of lobbying efforts by Cliffs. The Essar motion stated, “It appears that as a result of Cliffs’ lobbying efforts and communications with State officials against the ESML project, the State of Minnesota determined it would not continue to work with the Debtors to allow them the time necessary [to] complete the Project.” The court hearing is scheduled for September.
In December 2016, the Delaware bankruptcy court approved a request for the company to change its name to Mesabi Metallics.
Attorneys for Essar Steel Minnesota said, “The debtors believe that this change will support a successful reorganization.” In addition the new name, said the attorneys, would “better distinguish ESML from the other Essar affiliates” in the case against Essar Global Fund.
Sandy Williams
Read more from Sandy WilliamsLatest in Steel Products Prices North America
September Import Share of US Sheet and Plate Markets
Imported sheet and plate products arrived at US ports at a slower clip in September, accounting for a lower share of the domestic market for the third straight month. That’s according to a Steel Market Update analysis of import data from the US Commerce Department and domestic shipment figures from the American Iron and Steel […]
US Apparent Steel Supply Falls Further in September
US apparent steel supply eased further in September, down 8% from August to 8.29 million net tons, according to data from the US Department of Commerce and the American Iron and Steel Institute (AISI). As the lowest monthly figure since February 2021, this was a 19-month low. September supply was 10% below the average monthly rate […]
Northwest Pipe Reports Sharply Higher Q3 Results
Engineered pipe and tube producer Northwest Pipe Co. posted sharply higher profits for the third quarter ended Sept. 30. The Vancouver, Wash.-based company said the boost was driven by strong demand and increasing backlogs from its engineered pipeline systems and precast products, according to earnings data released on Tuesday, Nov. 8 All told, Northwest Pipe posted net […]
SMU Price Ranges: Flat-Rolled Steel Falls (Yet Again)
Sheet prices fell across the board again this week as the slow grind lower that we’ve seen since last spring continued to gain speed. Hot-rolled coil prices fell $30 per ton ($1.50 per cwt) week-over-week. Declines in coated products were more pronounced, with cold rolled down $55 per ton, galvanized down $35 per ton, and […]
US Steel Exports Slip 10% in September
US steel export volumes shrunk 10% from August to September, according to the latest US Commerce Department data. 723,000 net tons of steel products exited the country during the month, now the fourth-lowest monthly export rate over the past year and a half. Recall that exports levels in August were at the third-highest monthly rate […]