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The love-hate relationship between Essar Steel Algoma and Cliffs Natural Resources has flared again as the Sault Ste. Marie steel maker and the Cleveland iron-ore miner will be duking it out in court.
Cliffs filed a US $90-million suit Jan. 12 claiming that Essar has been in continuous breach of a taconite pellet sale and purchase agreement for the past two years.
Essar responded Feb. 13 that it has filed a counter claim against Cliffs for US $164 million in damages, “including a claim for certain outstanding credit payments owned by Cliffs.”
The suit was filed in the District Court for the Northern District of Ohio.
“Cliffs is disappointed that Essar Steel Algoma has failed to honour its obligations under the agreement, but looks forward to addressing the issues in court,” said Cliffs in a statement.
Cliffs is the supplier of taconite pellets to Essar. Despite their litigious relationship, the supply contract remains intact and Essar said it will continue to take delivery of Cliffs pellets.
It’s not the first time the two companies have squabbled over taconite.
In 2011, Essar paid $129 million in settling an arbitration case with Cliffs after a dispute over the price of iron ore sold to Essar.
Cliffs and Essar are shaping up to be competitors on northern Minnesota’s Mesabi Iron Range as Essar is building a taconite mine and processing mill in Nashwauk.
Lourenco Goncalves, the new CEO of Cliffs, was lobbying Minnesota lawmakers this month urging them to overturn a US $67 million subsidy granted to Essar Steel Minnesota in 2007 for the development.
Goncalves said it threatens Cliffs’ operation and state jobs by creating a glut of taconite in the U.S. market.
Cliffs is in the process of dumping its Canadian assets, including its money-losing Bloom Lake iron-ore mine project in Quebec and its chromite deposits in the Ring of Fire, to focus on its core U.S. taconite iron-ore mines in Michigan and Minnesota.
