Essar Global Fund has sued the Minnesota Natural Resources and Administration departments, attempting to block the state's efforts to stop the Dubai-based firm from doing business in Minnesota.
Essar Global in January bought the debt of Mesabi Metallics, which has pledged to finish a $2.6 billion taconite project on the Iron Range that an Essar subsidiary abandoned in 2016 after missing several deadlines tied to its state aid and failing to pay millions to contractors.
The lawsuit, filed Feb. 20 in Ramsey County District Court, seeks a restraining order that would prevent the state from moving forward on a request from the Department of Natural Resources (DNR) to "debar" Essar from operating in Minnesota.
"Essar remains interested in the successful completion of the project," the lawsuit said, but the debarment petition could jeopardize it.
The company also claims that the Department of Administration (DOA) does not have the authority to debar Essar and that the DNR is infringing on Essar Global's rights to constitutional due process.
Jess Richards, assistant commissioner for the DNR, said the state plans to fight the litigation.
DOA officials on Wednesday declined to discuss Essar's lawsuit but said the department does have the authority to debar companies and has done so 26 times since 2016. Usually the reason was failure to pay workers, said Curtis Yoakum, an assistant commissioner of the DOA.
Because the DOA has yet to act on DNR's debarment request, Richards said Essar's lawsuit is premature.