Business EconomyPosted at: Jun 2 2026 5:37PM


Essar-backed Mesabi Metallics sells half of royalty interest in $265 mn deal to support expansion of Minnesota Iron Ore Project

Mumbai, Jun 2 (UNI) Mesabi Metallics Company LLC, backed by the Essar Group, has agreed to monetise 50 per cent of its royalty interest through a transaction with The Metals Royalty Company Inc (TMCR) valued at $265 million.
The deal implies a valuation of more than $500 million for Mesabi Metallics' royalty platform and marks another significant milestone for the Minnesota-based iron ore development project.
Under the agreement, TMCR will acquire a 50 per cent royalty interest in two equal tranches worth $132.5 million each. The first tranche was completed on June 1, 2026, while the second is expected to close within the next 60 days. Company officials said that the majority of the proceeds will be utilised to support the future growth and development of Mesabi Metallics.
The transaction highlights the scale and strategic significance of Mesabi Metallics' Direct Reduction (DR)-grade iron ore operation in Minnesota, which includes a mine, beneficiation plant and pellet facility. The project is expected to commence production in the third quarter of 2026 and is positioned to play an important role in strengthening North America's domestic supply of high-grade iron ore pellets.
Upon commencement of operations, Mesabi Metallics is expected to become one of the few major domestic producers of merchant DR-grade iron ore pellets in North America. These pellets serve as a critical raw material for electric arc furnace steelmaking. At present, the United States depends heavily on imports from Brazil and other countries to meet demand for such products. The company's output is expected to enhance domestic manufacturing competitiveness while supporting key sectors including infrastructure, automotive production, shipbuilding, defence and energy.
Mesabi Metallics is also expected to rank among the world's lowest-cost iron ore producers at start-up. The anticipated cost advantage stems from the quality and scale of its ore reserves, modern processing facilities and its strategic location in the American Midwest. The company is designed to produce some of the highest-grade DR pellets available globally, positioning its products as a preferred feedstock for electric arc furnace steelmakers.
The royalty transaction follows the announcement of more than $670 million in financing commitments secured for the project. These include $520 million from Breakwall Capital and $150 million from Macquarie Group. In addition, Mesabi Metallics has received an indication of support of up to $10 billion from the Export-Import Bank of the United States.
According to the company, the combination of financing support and the latest royalty transaction reflects growing institutional confidence in one of the United States' most significant critical mineral and industrial development projects. The financings also underscore confidence in Mesabi Metallics' assets, management team and long-term strategic importance to American manufacturing and industrial supply chains.
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Tags: #Essar-backed Mesabi Metallics sells half of royalty interest in $265 mn deal to support expansion of Minnesota Iron Ore Project
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