The Metals Royalty Company is betting big on America’s push to rebuild its steel supply chain — striking a $132.5 million deal to buy a royalty stake in a massive Minnesota iron ore project that executives say could become a cornerstone of the nation’s “green steel” future.
The London-based royalty firm, which trades on Nasdaq under the ticker TMCR, said Wednesday it entered into a definitive agreement to acquire a 1% production royalty interest tied to the Mesabi Metallics iron ore project in Nashwauk, Minn.
The deal gives TMCR a slice of future production revenue from one of the country’s only iron ore projects, a key raw material used in cleaner electric arc furnace steelmaking.
TMCR said the acquisition price totals $132.5 million, including $125 million in cash and $7.5 million in company stock.
The company is financing the purchase through a $75 million PIPE raise priced at $13 per share, along with a proposed credit facility of up to $50 million.
TMCR said founders and insiders are contributing $15 million to the PIPE financing.
The royalty structure is tied to production from the Mesabi Metallics project up to 8.5 million tons annually, with an additional smaller royalty above that threshold.
The agreement also includes a $150-per-ton revenue floor linked to DR-grade pellet pricing, giving TMCR downside protection if iron ore prices weaken.
The project has become one of the largest industrial developments underway in Minnesota.
Mesabi Metallics spans more than 16,000 acres in northern Minnesota and is expected to produce DR-grade pellets used in electric arc furnace steelmaking, which is widely viewed as a lower-emissions alternative to traditional blast furnace steel production.
TMCR said first production is targeted for the second half of 2026, with full ramp-up expected in 2027.
The company estimates the royalty could eventually generate annual cash flow of more than $13 million, depending on production levels and iron ore pricing.
The Mesabi project is backed by Essar Group, the Indian industrial conglomerate that has already invested more than $2 billion of equity into the site, according to TMCR.
Total investment in the project is expected to exceed $2.5 billion.
The project has also received support from major financial institutions and federal officials.
TMCR said Mesabi Metallics secured a $520 million senior secured facility from Breakwall Capital and a $150 million liquidity line from Macquarie Group.
The US Export-Import Bank has also announced support of up to $10 billion tied to the project, calling it strategically important to the domestic steel supply chain.
TMCR chairman and CEO Brian Paes-Braga described the acquisition as “a defining milestone” for the company.
“I believe Mesabi is one of the most strategically significant industrial projects currently under development in the United States,” Paes-Braga said in a statement.
He said the project arrives as the US seeks to “reshore its steel supply chain and reduce reliance on imported raw materials.”
