New Delhi, March 31 Mesabi Metallics Company LLC, backed by the Essar Group, has secured a USD 520 million senior secured credit facility from funds managed by Breakwall Capital LP, as it moves forward with starting operations at its Minnesota iron ore project later this year.
The financing, provided by Breakwall-managed Valor Mining Credit Partners II in partnership with Vitol, supports the development of a USD 2.5 billion direct reduction (DR)-grade iron ore mine and pellet plant to strengthen the US steel supply chain, the company said in a statement.
Located on more than 16,000 acres in northern Minnesota, the project is among the largest private industrial investments in the state, with over USD 2 billion of equity already invested by Essar.
The company said that the project, which has also received backing from the Export-Import Bank of the United States, is expected to reduce reliance on imported raw materials and support domestic steel production across sectors, including automotive, infrastructure, and defense.
Construction is ongoing with more than 750 workers onsite, and the project is targeting commercial operations later in 2026.
"Mesabi Metallics Company LLC (Mesabi Metallics) has entered into a new USD 520 million senior secured credit facility with Valor Mining Credit Partners II, LP (VMP II), a dedicated mining and critical minerals credit fund managed by Breakwall Capital LP (Breakwall) in partnership with Vitol, as it advances toward commercial operations later this year," it said.
With over 750 construction workers currently onsite, the project represents one of the largest private-sector industrial investments in Minnesota's history. Essar Group has already invested over USD 2 billion of equity into the project.
The project has also received support from the US Export-Import Bank (EXIM), underscoring growing federal recognition of the project's strategic importance to the US manufacturing and supply chain security for the American manufacturing, automobile, infrastructure, shipbuilding, and defense sectors.
"The partnership with Breakwall is an important milestone for Mesabi Metallics," said Joe Broking, President and CEO of Mesabi Metallics.
"We are bringing to market a brand-new American source of the highest quality DR-grade iron ore that will help US steelmakers reduce reliance on imported raw materials and international supply chains," Broking said.
America is already the global leader in the next generation Electric Arc Furnace-based steelmaking – the cleanest and most energy-efficient way of making steel. Mesabi Metallics will create hundreds of high-quality jobs in northern Minnesota for several decades to come and will support the reshoring of American industrial dominance, the top official added.
"Mesabi Metallics is a great example of the type of high-quality company and large-scale mining project we seek to partner on – anchored by a long-life resource in an advanced stage of development, with strategic importance to critical industrial development. We look forward to building upon this partnership with Mesabi Metallics and supporting them in their journey," said Daniel Flannery, President and Managing Partner of Breakwall.
"This deal further demonstrates the breadth of our partnership with Vitol, combining credit solutions with global resource marketing acumen, to deliver a multitude of solutions for top-tier companies like Mesabi Metallics and world-class operators like the Essar Group," added Jamie Brodsky, Co-CEO and Managing Partner of Breakwall.
Mesabi Metallics, an Essar Group company, is constructing a state-of-the-art mine and Direct Reduction (DR) grade iron ore pellet plant to produce premium DR grade pellets on over 16,000 acres in Nashwauk, Minnesota. Once completed, it will be the first new mine and pellet plant in Minnesota in almost 50 years.
Mesabi's DR-grade iron ore pellets will be strategically positioned to meet the demand of the Electric Arc Furnace market, ensuring supply chain security for DR-grade iron pellets in the United States and replacing foreign imported pellets. The endeavor is one of the largest private sector investments in Minnesota. Mesabi Metallics has already invested over USD 2.2 billion.
Breakwall Capital is a leading energy specialist focused on direct lending capital solutions to middle-market and developing energy companies.