Mesabi Metallics Is Laying Off about 25 Employees
Iron ore mining company Mesabi Metallics Company LLC has announced that it will be cutting about 50% of its workforce as its new owners take over the company. Prior to the layoffs, Mesabi Metallics employed 50 employees.
The Minnesota-based iron ore producer filed for bankruptcy a year ago this month. After year-long bankruptcy proceedings, the company got bought out by investment firm Chippewa Capital Partners. The firm’s principal partner is Virginia-based billionaire Tom Clarke.
Chippewa Capital Partners bought Mesabi Metallics for its Nashwauk iron ore project, which was put on hold through Mesabi’s bankruptcy. The project was half-built, and has been sitting idle for more than a year.
Chippewa Capital is also currently in the process of purchasing a steel mill. Mesabi’s takeover complements Clarke’s plan. The Nashwauk project will help supply the iron ore for the mill.
After winning the bid for Mesabi Metallics in April, Chippewa Capital had set a goal of finishing the construction of the Nashwauk project in 18 to 24 months. However, just two months after making that promise, approximately 25 layoffs were been announced at the troubled Mesabi Metallics.
A statement released by Mesabi Metallics following the layoffs says that Chippewa is planning to hire external contractors to complete the Nashwauk project, instead of using Mesabi’s own employees. Since fewer employees will now be needed to oversee the construction project, Chippewa has decided to lay off Mesabi workers.
The takeover of Mesabi Metallics by Chippewa Capital Partners is expected to be complete by August. Mesabi has confirmed that no more layoffs are expected, at least until that time.
“As Chippewa takes over, Mesabi Metallics has layoffs,” Duluth News Tribune, July 5, 2017.
“Virginia billionaire and partners win bankruptcy auction for ex-Essar assets,” Star Tribune, April 26, 2017.