Missing payments from Essar Steel spur anger on the Iron Range

Construction work
A construction worker walked past numerous steel beams at the Essar Steel site in March.
Derek Montgomery | For MPR News

Work has stopped on a massive new taconite mine and plant on the Iron Range, as contractors await payment from Essar Steel.

Several vendors are still owed more than $10 million for work done this year on Essar's nearly $2 billion facility between Grand Rapids and Hibbing.

"There's a lot of angst throughout the Range right now, with the status of our economic condition in iron and steel, this story only adds to that anger," said state Rep. Tom Anzelc, DFL-Balsam.

The state lent Essar $66 million seven years ago to help build the facility. Essar said in a statement that it has paid vendors $20 million since Oct. 12, and that it's working to find additional funds.

Ironworkers Local 512 has pulled most of its workers from the site, said Barry Davies, the union's business manager.

"It's been quite a hardship on our contractors," Davies said. "Because they've made the wages for the members out of their own pockets, expecting money from Essar, and haven't received it."

He said contractors are expecting partial payments from Essar this week and next, and hopes to have members back working after the new year.

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