Mesabi Metallics Company LLC, backed by Essar Group, has agreed to sell 50 per cent of its royalty interest to The Metals Royalty Company Inc for $265 million, implying a valuation of over $500 million for the royalty platform.
The transaction with TMCR will be completed in two equal tranches of $132.5 million each. The first tranche closed on June 1 with the second tranche expected to close in 60 days.
The majority of the proceeds from this transaction will be deployed towards the future growth of Mesabi Metallics.
The transaction validates the long-term strategic importance of Mesabi Metallics’ Direct Reduction (DR) grade iron ore mine, beneficiation plant and pellet plant in Minnesota, which is expected to commence production in the third quarter of 2026, said the company.
Once operational, Mesabi Metallics will become a significant domestic producer of merchant DR-grade iron ore pellets in North America.
These pellets are a critical input for electric arc furnace steelmaking, yet the United States currently relies heavily on imports from Brazil and other countries for supply.
The transaction follows more than $670 million of recently announced financing commitments, including $520 million from Breakwall Capital and $150 million from Macquarie Group. Mesabi Metallics has also received an indication of support from the Export-Import Bank of the United States (EXIM) of up to $10 billion.
Artem Matyushok, Board Member of Mesabi Metallics said as the United States works to rebuild domestic industrial capacity and secure critical supply chains, DR-grade iron ore has become an increasingly important strategic resource.
Brian Paes-Braga, Founder, Chairman and CEO of TMCR said Mesabi Metallics represents one of the most strategically important mining projects under development in North America.