Essar-backed Mesabi Metallics sells 50% royalty stake to TMCR for $265 million
Once operational, Mesabi Metallics is set to become one of North America's few major domestic producers of merchant DR-grade iron ore pellets, a key raw material for electric arc furnace steelmaking.
Scotiabank acted as the exclusive financial adviser to Mesabi Metallics and its affiliates on the transaction. Mesabi Metallics Company LLC, backed by the Essar Group, has agreed to sell a 50 per cent stake in its royalty interest to The Metals Royalty Company Inc. (TMCR) for $265 million, valuing the royalty platform at over $500 million.
The transaction will be completed in two equal tranches of $132.5 million each. The first tranche closed on June 1, 2026, while the second is expected to close within 60 days. Most of the proceeds will be used to support Mesabi Metallics’ future growth plans.
The deal underscores the quality, scale and long-term strategic importance of Mesabi Metallics’ direct reduction (DR)-grade iron ore mine, beneficiation plant and pellet facility in Minnesota, which is expected to begin production in the third quarter of 2026.
Once operational, Mesabi Metallics is set to become one of North America’s few major domestic producers of merchant DR-grade iron ore pellets, a key raw material for electric arc furnace steelmaking. The US currently depends heavily on imports from Brazil and other countries for these pellets. The project is expected to strengthen domestic manufacturing and support sectors such as infrastructure, automotive, shipbuilding, defence and energy.
“TMCR’s investment is a powerful third-party validation of Mesabi’s quality and strategic importance,” said Artem Matyushok, board member of Mesabi Metallics. “As the United States seeks to rebuild domestic industrial capacity and secure critical supply chains, DR-grade iron ore has become an increasingly strategic resource.”
The transaction 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 of up to $10 billion from the Export-Import Bank of the United States (EXIM).
Together, these commitments highlight growing institutional confidence in what is considered one of the largest critical minerals and industrial development projects in the US.
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 its scale, quality, long mine life and role in supporting the re-industrialisation of the United States.
Scotiabank acted as the exclusive financial adviser to Mesabi Metallics and its affiliates on the transaction.
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