Essar-backed Mesabi Sells Royalty Stake for $265M

New Delhi, Jun 2 (PTI) Essar Group-backed Mesabi Metallics has agreed to sell a 50 per cent stake in its royalty interest to The Metals Royalty Company (TMCR) for USD 265 million, in a transaction that values the royalty platform at more than USD 500 million and provides fresh capital as the US iron ore project approaches production.

The transaction will be completed in two tranches of USD 132.5 million each, with the first closing on June 1 and the second expected within 60 days.

In a statement, Mesabi said most of the proceeds will be used to support future growth initiatives.

"The transaction further validates the exceptional quality, scale and long-term strategic importance of Mesabi Metallics' world-class 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," it said.

Once operational, Mesabi is expected to become one of the few significant domestic suppliers of merchant DR-grade iron ore pellets in North America, a key raw material used in electric arc furnace steelmaking. The project is positioned to reduce US dependence on imported DR-grade iron ore, particularly from Brazil and other overseas suppliers.


The company said its mine, beneficiation facility and pellet plant are designed to produce high-grade DR pellets while benefiting from a low-cost operating structure driven by the scale and quality of its ore reserves and its location in the US Midwest.

The royalty transaction follows more than USD 670 million of recently announced financing commitments, including USD 520 million from Breakwall Capital and USD 150 million from Macquarie Group. Mesabi has also secured an indication of support of up to USD 10 billion from the Export-Import Bank of the United States (EXIM), highlighting growing investor and institutional backing for the project.

"TMCR's investment is a powerful third-party validation of the quality and strategic importance of Mesabi," said Artem Matyushok, a board member of Mesabi Metallics, adding that 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, citing its scale, long mine life and exposure to the re-industrialization of the United States.

Scotiabank served as exclusive financial adviser to Mesabi Metallics and its affiliates on the transaction.