5 September 2024
NASHWAUK — A federal bankruptcy judge found “sufficient evidence” that a juror could find Cleveland-Cliffs engaged in anticompetitive behavior that harmed Mesabi Metallics as it tried to build an iron ore mine and pellet plant.
The case will now head to trial in a district court, where a jury will consider Mesabi’s damage claims. The company is seeking $1.9 billion from Cliffs.
In a 95-page memorandum opinion made public in U.S. Bankruptcy Court in Delaware on Wednesday, Judge Craig Goldblatt wrote that “there is sufficient evidence that permits a reasonable juror to conclude that Cliffs’ conduct was anticompetitive.
“Acquiring key mining property and entering into a long-term exclusive supply agreement with one of the largest customers in the region, coupled with pressuring critical contractors working on Mesabi’s project to terminate their relationships with Mesabi, could substantially foreclose Mesabi from the market and exclude competition,” Goldblatt wrote.
Goldblatt wrote he was satisfied that Mesabi had met the burden of proof in showing it “has suffered
some
damages as a result of Cliffs’ alleged anticompetitive conduct” and evidence supports “a finding that Cliffs’ alleged exclusionary actions caused Mesabi an antitrust injury.”
Mesabi, owned by Mumbai-based Essar Global, has for 17 years had multiple owners, managers and names as it floundered through construction stoppages, bankruptcies, missed deadlines, late payments and other legal battles.
But in a news release Thursday morning, Mesabi Metallics President and CEO Joe Broking said the judge’s memorandum of opinion was a legal victory for the company.
“Mesabi is pleased that the court’s ruling supports our position that Cliffs impeded our ability to complete the project,” Broking said. “Mesabi hopes the decision, coupled with Essar’s and Mesabi’s continued investment in the project, helps address the past disappointment caused to our partners and stakeholders by the previous delays to the project.”
Cliffs did not respond to the News Tribune’s request for comment.
Cliffs and Mesabi have waged a bitter battle over control of mineral rights in the Nashwauk area for over a decade.
In 2023, Minnesota officials awarded state leases once held by Mesabi Metallics to Cliffs, which said it intends to mine the ore from the Nashwauk-area leases and then rail it to Hibbing Taconite, keeping the facility open for at least another two decades.
Mesabi Metallics has maintained its plans to finish the half-built pellet plant and start mining. Earlier this week, it said it planned to double or triple its employee headcount by the end of the year to 75 to 100 employees.
Eventually, it wants to construct a hot-briquette iron plant and an electric-arc furnace steel plant — both of which were permitted years ago.
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