Mesabi Metallics sells 50% royalty stake for $265 million, valuing platform at $500 million+
Synopsis
Essar-backed Mesabi Metallics has unlocked over $265 million by selling half its royalty interest to TMCR — implying a $500 million-plus platform valuation — even before its Minnesota plant has produced a single tonne. With $670 million in fresh financing and a $10 billion EXIM Bank indication behind it, the project is rapidly emerging as the US steel industry's most consequential domestic supply-chain bet.
Key Takeaways
Mesabi Metallics agreed to sell 50% of its royalty interest to TMCR for $265 million , implying a royalty platform valuation of more than $500 million .
The deal closes in two tranches of $132.5 million each ; the first closed on 1 June 2026 , the second expected within 60 days .
Mesabi's Minnesota DR-grade iron ore mine and pellet plant is expected to begin production in Q3 2026 .
Total recent financing commitments exceed $670 million , from Breakwall Capital ($520 million) and Macquarie Group ($150 million), plus a $10 billion EXIM Bank support indication.
Once operational, Mesabi will be among the only significant domestic producers of merchant DR-grade iron ore pellets in North America , reducing US reliance on imports from Brazil .
Mesabi Metallics Company LLC, backed by Essar Group, has agreed to sell 50 per cent of its royalty interest to The Metals Royalty Company Inc. (TMCR) for a total consideration of $265 million, implying a valuation of more than $500 million for its royalty platform. The deal, announced on 2 June 2026, marks a significant milestone for one of North America's most closely watched critical minerals projects.
Transaction Structure
The deal will be executed in two equal tranches of $132.5 million each. The first tranche closed on 1 June 2026, with the second expected to close within 60 days. According to the company, the majority of the proceeds will be channelled toward the future growth of Mesabi Metallics. Scotiabank served as exclusive financial adviser to Mesabi Metallics and its affiliates in connection with the transaction.
The Asset at the Centre of the Deal
The transaction further validates the scale and strategic importance of Mesabi Metallics' Direct Reduction (DR)-grade iron ore mine, beneficiation plant, and pellet plant located in Minnesota. The facility is expected to commence production in the third quarter of 2026. Once operational, Mesabi Metallics will become one of the only significant domestic producers of merchant DR-grade iron ore pellets in North America — a feedstock that is critical for electric arc furnace steelmaking and that the United States currently sources heavily from Brazil and other countries.
At startup, the company is projected to rank among the lowest-cost iron ore producers globally, an advantage driven by the quality and scale of its ore body, modern processing infrastructure, and its location at the heart of the midwestern United States.
Broader Financing Picture
The TMCR deal 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 (EXIM) of up to $10 billion. Together, these financings signal growing institutional confidence in the project's long-term viability and strategic importance to US industrial supply chains.
What the Key Voices Said
Artem Matyushok, Board Member of Mesabi Metallics, said the TMCR investment was 'a powerful third-party validation of the quality and strategic importance of Mesabi,' adding that DR-grade iron ore has become 'an increasingly important strategic resource' as the United States works to rebuild domestic industrial capacity.
Brian Paes-Braga, Founder, Chairman and CEO of TMCR, described Mesabi Metallics as 'one of the most strategically important mining projects under development in North America,' citing the project's scale, quality, long mine life, and exposure to US re-industrialisation. 'We believe Mesabi will play a critical role in supplying the domestic steel industry for decades to come,' he said.
Strategic Implications
Mesabi Metallics' output is designed to support critical industries including infrastructure, automotive, shipbuilding, defence, and energy — sectors that sit at the heart of ongoing US efforts to reduce import dependence in strategic materials. This is the latest in a series of large-scale financing milestones for the project, reinforcing its positioning as a cornerstone asset in North America's critical minerals landscape. All eyes will now be on whether the facility meets its Q3 2026 production start target.
Point of View
If converted, would be one of the largest US government-backed industrial financing commitments in recent memory, and deserves scrutiny on timelines and conditionalities that have not yet been publicly detailed. Essar Group's ability to attract Macquarie and Breakwall alongside a royalty buyer suggests the project has cleared a credibility threshold that earlier phases of its development did not. The real test remains execution: a Q3 2026 production start is ambitious for a project of this scale, and any delay would test the confidence that these headline financing numbers project.
NationPress
9 Aug 2026
Frequently Asked Questions
What is the Mesabi Metallics royalty deal with TMCR?
Mesabi Metallics has agreed to sell 50 per cent of its royalty interest to The Metals Royalty Company Inc. (TMCR) for $265 million, implying a total royalty platform valuation of more than $500 million. The deal closes in two equal tranches of $132.5 million each, with the first tranche completed on 1 June 2026.
What does Mesabi Metallics produce and where is it located?
Mesabi Metallics operates a Direct Reduction (DR)-grade iron ore mine, beneficiation plant, and pellet plant in Minnesota, United States. Its pellets are a critical input for electric arc furnace steelmaking, and the facility is expected to begin production in the third quarter of 2026.
Who is backing Mesabi Metallics financially?
Mesabi Metallics, backed by Essar Group, has secured more than $670 million in recent financing commitments — $520 million from Breakwall Capital and $150 million from Macquarie Group. It has also received an indication of support from the Export-Import Bank of the United States (EXIM) of up to $10 billion.
Why is DR-grade iron ore strategically important for the United States?
DR-grade iron ore pellets are a key feedstock for electric arc furnace steelmaking, and the US currently relies heavily on imports from Brazil and other countries to meet demand. Mesabi Metallics' production is expected to reduce that import dependence and support domestic industries including infrastructure, automotive, defence, and energy.
When will Mesabi Metallics begin production?
The company's Minnesota facility is expected to commence production in the third quarter of 2026. At startup, Mesabi Metallics is projected to rank among the lowest-cost iron ore producers globally, driven by the grade of its ore body, modern infrastructure, and its midwestern US location.
