MINNEAPOLIMEDIA NEWS | Minnesota’s First New Taconite Mine in 50 Years Begins Extracting Ore on Iron Range

NASHWAUK, MN (September 24, 2026). Minnesota’s first new taconite mine in approximately half a century has begun extracting iron ore near Nashwauk, marking a major industrial milestone after nearly two decades of construction delays, bankruptcy proceedings and disputes over mineral rights.

Mesabi Metallics is completing a $2.5 billion mine and processing complex at the former Butler Taconite site. Company officials expect the new pellet plant to begin production in October.

An initial blast involved more than one million pounds of explosives and dislodged an estimated 1.3 million tons of ore. The material will be crushed, concentrated and processed into specialized pellets for steel production.

Approximately 1,500 construction workers remain at the site, while the company has hired more than 200 people toward a projected permanent workforce of 350.

The opening arrives during a difficult period for northeastern Minnesota’s mining economy. Minorca in Virginia and Hibbing Taconite closed last year, leaving hundreds of workers without permanent employment. Union officials said some displaced workers have already left Minnesota for mining jobs elsewhere, while others have been hired by Mesabi.

The facility is expected to produce approximately seven million tons of iron-ore pellets annually. Company and local officials project that its operations will generate tens of millions of dollars in tax revenue for schools and local governments while creating some of the region’s highest-paying industrial jobs.

Mesabi plans to manufacture direct-reduction pellets, a higher-grade product that can supply electric-arc furnaces. Those furnaces now produce a substantial majority of American steel and can operate more efficiently than traditional blast-furnace systems.

Essar, the Indian conglomerate that owns Mesabi, resumed construction after an earlier bankruptcy left the development unfinished. The company has since repaid Minnesota nearly $50 million and made another $47 million in lease, tax and rental payments.

The federal Export-Import Bank has awarded the project a $770 million loan.

Mesabi is also considering a second investment of approximately $5 billion for a direct-reduced-iron facility. Company executives say Minnesota remains under consideration, but they are also examining locations outside the state and have advertised positions connected to a proposed facility in Kentucky.

The company is asking Minnesota officials for faster environmental permitting, additional economic incentives and the return of mineral leases transferred to Cleveland-Cliffs after Essar failed to satisfy earlier agreements.

Cleveland-Cliffs has argued that the leases are needed to prolong the life of Hibbing Taconite. Mesabi has filed an antitrust lawsuit accusing the competitor of obstructing its development and is seeking more than $5 billion in damages. A jury trial is scheduled for next year.

Without the disputed leases, Mesabi estimates that its current ore reserves could sustain mining for approximately 23 years.

The project represents both a major employment opportunity and a renewed test of how Minnesota balances industrial development, mineral ownership, environmental review and the transition toward lower-emission steelmaking.
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