ST. PAUL - Gov. Mark Dayton says Essar Steel Minnesota has agreed to repay the state loans tied to its taconite plant project.

Dayton says he was notified Wednesday that Essar Steel Minnesota and its parent company have accepted his final offer for repayment of the state's $66 million in loans.

Last week Dayton gave the company until Dec. 30 to reach a repayment plan for state loans toward construction at the Nashwauk taconite plant site.

The offer requires Essar Steel to start making payments on the loan in February 2016, repaying $10 million to the state by the end of March 2016.

The remaining $56 million will then be repaid in quarterly payments, starting in 2017.

Essar has struggled to open a proposed $1.8 billion iron ore processing plant in northeastern Minnesota.