Mesabi Metallics announced that it has agreed to sell 50% of its royalty interest to The Metals Royalty Company Inc. (TMCR) for total consideration of $265 million, implying a valuation of more than $500 million for the royalty platform.
The transaction will be completed in two equal tranches of $132.5 million each. The first tranche closed on June 1, 2026, while the second tranche is expected to close within 60 days. The majority of the proceeds will be used to support the future growth of Mesabi Metallics.
Backed by Essar Group, Mesabi Metallics is developing a $2.5 billion Direct Reduction (DR) grade iron ore mine, beneficiation plant, and pellet plant in Nashwauk, Minnesota. The company expects production to begin in the third quarter of 2026.
The company said the transaction validates the quality, scale, and strategic importance of its project, which is expected to become one of the only significant domestic producers of merchant DR-grade iron ore pellets in North America. These pellets are used in electric arc furnace steelmaking, a segment that currently relies heavily on imports from Brazil and other countries.
Mesabi Metallics expects to be among the world’s lowest-cost iron ore producers due to the quality and scale of its ore body, modern processing infrastructure, and strategic location in the U.S. Midwest. The company is also targeting production of some of the highest-grade DR pellets globally.
The royalty transaction follows more than $670 million in 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 for up to $10 billion. The company said these financing commitments reflect growing confidence in the project and its role in strengthening U.S. critical mineral supply chains and domestic manufacturing capabilities.
Scotiabank served as exclusive financial advisor to Mesabi Metallics and its affiliates on the transaction.
Mesabi Metallics said the project will be the first new iron ore mine and pellet plant developed in Minnesota in nearly 50 years and is expected to provide a secure domestic source of raw materials for the U.S. steel industry, infrastructure development, shipbuilding, defense, and manufacturing sectors.
KEY QUOTES:
“TMCR’s investment is a powerful third-party validation of the quality and strategic importance of Mesabi. 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. Mesabi is uniquely positioned to supply that resource from a long-life American asset while creating substantial value for our stakeholders.”
Artem Matyushok, Board Member, Mesabi Metallics
“Mesabi Metallics represents one of the most strategically important mining projects under development in North America. The project combines scale, quality, long mine life and direct exposure to the re-industrialization of the United States. We believe Mesabi will play a critical role in supplying the domestic steel industry for decades to come.”
Brian Paes-Braga, Founder, Chairman and CEO, The Metals Royalty Company Inc.
