Magnetation LLC said Thursday ERP Iron Ore, LLC has agreed to buy its remaining assets, subject to bankruptcy court approval.
In a news release, the Grand Rapids mining company said the agreement also calls for ERP Iron Ore to assume certain liabilities and contracts and leases Magnetation holds with lenders.
According to Bloomberg, ERP is based in Natural Bridge, Va. The firm seems to have an interest in acquiring distressed properties, according to Canadian media reports. Earlier this year, the company expressed an interest to acquire the Wabush Mine in Labrador, which Cliffs Natural Resources closed during 2014. That deal eventually was scuttled. ERP also bid to acquire the former Stelco plant in Hamilton, Ont. Both Washbush and Stelco were for sale as part of Canadian bankruptcy proceedings. Stelco, which was part of U.S. Steel Canada, eventually sold to Bedrock Industries Group.
The Seeking Alpha web site has reported ERP Compliant Fuels is a subsidiary of the Virginia Conservation Legacy Fund, which has purchased coal mines previously operated by Patriot Coal and Walter Energy, also through bankruptcy proceedings.
"After 19 months under bankruptcy protection, we are pleased to have reached this important milestone supported by a wide coalition of the stakeholders in this case. This outcome provides the potential for a restart at some point in the future of the state of the art Magnetation assets as a going concern, which has been our goal and would provide the best possible value to the estate and its stakeholders," Larry Lehtinen, CEO of Magnetation, said in the prepared statement. “We are especially pleased to be acquired by ERP Iron Ore, LLC, an affiliate of ERP Compliant Fuels, LLC, an innovative company founded and led by Tom Clarke, with whom we share a vision for advancing our unique and environmentally responsible technology that turns abandoned iron resources into valuable, high quality iron ore pellets to serve steel-makers on a global scale."
Magnetation developed a process to recover high-quality iron ore concentrate from previously abandoned iron ore waste stockpiles and tailings basins. The company suffered financial difficulties when the price of iron ore pellets plummeted in tandem with the demand for steel and an influx of cheap imported steel.
When the deal closes, ERP will own iron ore concentrate plants located in Keewatin, Bovey and Grand Rapids, a railroad loading facility in Grand Rapids and a 3.0 million-tons-per-annum iron ore pellet plant in Reynolds, IN.
Source: Busienss North