Just days after Minnesota granted Virginia billionaire Tom Clarke the mineral lease rights for a $2 billion mining project in Nashwauk, it sent a notification of termination for the mineral lease rights regarding one of Clarke's sister projects in the Grand Rapids area.
The reason? Unpaid debt.
The Minnesota Department of Natural Resources sent the unexpected termination letter to Clarke's ERP Iron Ore group on Thursday. The letter notified ERP Iron Ore that it had failed to pay the state $34,200 in mineral leases related to Magnetation, an iron ore processing company it bought out of bankruptcy.
ERP officials could not immediately be reached for comment.
Clarke's ERP group bought Magnetation out of bankruptcy in February 2017. It also paid the state of Minnesota more than $600,000 in royalties associated with the property. However, it failed to pay the comparatively small lease fees due on the property.
In addition, ERP was taken to court in May by several other creditors who said ERP Iron owed them a total of more than $4.4 million.
The creditors, Minnesota Power being the largest, asked the courts to force ERP into involuntary bankruptcy. Initially, ERP fought the petition.
But last week, DNR officials said they learned that ERP withdrew its objection to the forced bankruptcy.