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Railroad Co. Backs Out of Essar Project

Posted at: 11/13/2012 4:50 PM
Updated at: 11/13/2012 6:12 PM

Itasca County leaders now have to select a new short line railroad operator, for the Essar Steel Minnesota project.

That's because a few weeks ago, the previously selected company, Anacostia and Pacific, withdrew their proposal to be the operator.

Several reasons were cited in the letter from A&P, including the recent slowdown of construction at the site in Nashwauk.

Essar has said they were temporarily slowing down construction back in September. Last week, the company reported about 100 contractors are working on site on a weekly basis.

Itasca Co. Commissioner and Regional Railroad Authority board member Rusty Eichorn said that they will move forward and select another operator, and that this won't change the general timelines for the project.

"I was surprised. But I understand from a business perspective why they don't want to wait anymore. It's been almost six years since we chose them," he said.

The rail project coordinator said more discussion will happen at the Regional Railroad Authority's meeting in December.

One possible option is looking at some of the other companies who had submitted proposals in 2006.

Essar said that they are still in negotiations with CN and BNSF for the actual transport of iron ore pellets. A&P's involvement could have been with bringing limestone in, which helps make the pellets.