MESABI TRUST Announces Arbitration Final Award

NEW YORK--(BUSINESS WIRE)-- AAA Arbitration Final Award

As previously reported, on October 14, 2022, Mesabi Trust initiated arbitration against Northshore Mining Company (“Northshore”), the lessee/operator of the leased lands, and its parent, Cleveland-Cliffs Inc. (“Cliffs”), with the American Arbitration Association (“AAA”). The Trust sought an award of damages relating to Cliffs’ and Northshore’s underpayment of royalties in 2020, 2021, and the first four months of 2022 by virtue of Cliffs’ and Northshore’s failure to use the highest priced arm’s-length iron ore pellet sale from the preceding four quarters in pricing certain pellet shipments from 2020 through the first four months of 2022. The Trust also sought declaratory relief related to the Trust’s entitlement to certain documentation and to the time when Cliffs’ and Northshore’s royalty obligations accrue.

The evidentiary hearing was completed before a panel of three arbitrators in March 2024 under the commercial rules of the AAA. Post-hearing briefs were exchanged in May 2024. Post-hearing oral arguments and final submissions were concluded in June 2024. The Trust received the final award on September 6, 2024, which unanimously awarded the Trust damages in the amount of $59,799,977 for underpaid royalties in 2020, 2021 and the first four months of 2022, plus pre-award interest in the amount of $11,288,269, calculated at the rate of 10% simple interest per annum from the date of the initial demand through September 1, 2024, and continuing to accrue until paid. Pursuant to the award, Cliffs and Northshore must pay the Trust the amounts specified in the Award by no later than October 6, 2024. The Tribunal approved the parties’ stipulated Consent Award approving the Trust’s ongoing entitlement to certain documentation related to verifying royalty calculations. The Tribunal denied the Trust’s request for declaratory relief regarding the time at which Cliffs’ and Northshore’s royalty obligations accrue.

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Mesabi Trust SHR Unit

Deutsche Bank Trust Company Americas

904-271-2520

Source: Mesabi Trust

FAQ

What was the total amount awarded to Mesabi Trust (MSB) in the arbitration?

Mesabi Trust was awarded a total of over $71 million, consisting of $59,799,977 in damages for underpaid royalties and $11,288,269 in pre-award interest.

When must Cleveland-Cliffs and Northshore pay the arbitration award to Mesabi Trust (MSB)?

Cleveland-Cliffs and Northshore must pay the arbitration award to Mesabi Trust by October 6, 2024.

What period did the underpaid royalties cover in the Mesabi Trust (MSB) arbitration case?

The underpaid royalties covered the period from 2020 through the first four months of 2022.

What was the interest rate applied to the pre-award interest in the Mesabi Trust (MSB) arbitration?

The pre-award interest was calculated at a rate of 10% simple interest per annum.