DR-grade iron ore project backed as Mesabi Metallics sells 50% royalty stake for USD 265 million

Essar Group-backed Mesabi Metallics agreed to sell a 50 per cent stake. The sale covers part of Mesabi’s royalty interest to The Metals Royalty Company TMCR. The deal is worth USD 265 million. Mesabi said the funding arrived as the Minnesota iron ore project moved closer to production.

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The payment will be made in two equal parts of USD 132.5 million. Mesabi said the first tranche closed on June 1. The second closing is expected within 60 days. Mesabi added that most of the proceeds will support future growth initiatives.

Mesabi Metallics royalty stake deal and project timeline

Mesabi said the transaction valued the royalty platform at more than USD 500 million. Mesabi linked the deal to its Direct Reduction DR grade iron ore assets. These include a mine, a beneficiation plant, and a pellet plant in Minnesota. Mesabi said production is expected to begin in the third quarter of 2026.

Once operations start, Mesabi is expected to supply merchant DR-grade iron ore pellets. Mesabi described these pellets as a key input for electric arc furnace steelmaking. The company said the project could lower US reliance on imported DR-grade iron ore. Mesabi pointed to Brazil and other overseas suppliers as major sources.

Mesabi Metallics DR-grade iron ore pellets and US supply

Mesabi said its facilities are designed to make high-grade DR pellets. The company said costs should stay low due to ore reserve scale and quality. Mesabi also cited the US Midwest location as an advantage. Mesabi said the project is meant to support domestic supply for North America.

The company said the royalty deal followed more than USD 670 million in financing commitments. Mesabi listed USD 520 million from Breakwall Capital. Mesabi also cited USD 150 million from Macquarie Group. Mesabi said it also secured an indication of support of up to USD 10 billion from the Export-Import Bank of the United States EXIM.

Mesabi Metallics financing commitments and TMCR investment comments

"TMCRs investment is a powerful third-party validation of the quality and strategic importance of Mesabi,\" said Artem Matyushok, a board member of Mesabi Metallics. \"the project is positioned to support US efforts to strengthen domestic industrial capacity and secure critical supply chains.\"

TMCR Founder and Chief Executive Brian Paes-Braga described Mesabi as one of the most strategically important mining projects under development in North America. Brian Paes-Braga cited its scale, long mine life and exposure to the re-industrialization of the United States. Mesabi did not change its production target while announcing the TMCR investment.

Scotiabank served as exclusive financial adviser to Mesabi Metallics and its affiliates. The adviser role covered the royalty interest transaction with The Metals Royalty Company TMCR. Mesabi said the capital would back planned growth as work continued. Mesabi also kept its focus on reaching production in the third quarter of 2026.

With inputs from PTI