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The concentrator facility at the Essar Steel taconite plant in 2015. (file / News Tribune)

As Chippewa takes over, Mesabi Metallics has layoffs

Mesabi Metallics, the company that has been ushering the former Essar Steel Minnesota project through bankruptcy, announced Wednesday it was laying off about half of its 50-person workforce as new owners Chippewa Capital Partners take the project over.

Chippewa's bid to take over the Nashwauk taconite mine and processing center was approved in court June 13. The plan is expected to become effective in August. The project has been half-built but idle for 18 months.

In a statement released Wednesday by Mesabi Metallics, the company said because Chippewa is using a third-party general contractor to complete construction of the Nashwauk project, rather than having construction administered and overseen primarily by company personnel, fewer employees will be needed to manage and oversee construction.

Chippewa also plans to merge some functions between the Nashwauk facility and the former Magnetation operations, called ERP Iron Ore LLC, which is also owned by Tom Clarke, the principal partner in Chippewa.

Mesabi Metallics said it doesn't expect any more layoffs before the bankruptcy plan is implemented in August.

Mesabi Metallics employees who received layoff notices Wednesday have been encouraged to apply for employment opportunities with ERP's planned reopening of the Magnetation Plant 4 in Grand Rapids or at its Reynolds, Ind., pellet plant.