Cliffs NaturalResources Inc. CEO Lourenco Goncalves plans to salvage theEssar SteelMinnesota iron ore project, which for bankruptcy protection after astate regulator moved to cancel its leases to mine taconite iron, the Duluth (Minn.) News Tribune reported July 12.

Backed by Minnesota Gov. Mark Dayton, U.S. Representative RickNolan and state lawmakers from the Iron Range, Goncalves is planning to build adirectly reduced iron mill at the site, as well as to complete construction ofthe taconite plant that EssarGroup's embattled unit Essar Steel Minnesota Llc has been working on inNashwauk.

"If they [creditors] want to see anything for theirmoney from that site, they have two choices: Help me build an iron plant on theIron Range, or sell what's there now for scrap. Either way, I'm going to getit," CEO Goncalves said.

The state governor has offered state mineral lease at themine site to Cliffs CEO. However, it will be up to a federal judge to decide onwhether to keep the asset under the control of Essar, as the company'sofficials have pledged to secure financing deals and are hoping to convince thebankruptcy court to grant them control of the lease.

In March, Essar Steel Minnesota hired investment bankGuggenheim Partners LLC and law firm White & Case LLP as advisers to helpthe company refinanceits debt, which totals about US$1 billion.