Essar Group plans to build a $15 billion steel plant in Iowa, targeting 10 million tonnes of production annually. At an Oval Office event on Monday, Donald Trump said the project will create 8,000 jobs. The company plans to use iron ore from Minnesota mines to produce 100 per cent American steel.
Donald Trump with Rewant (extreme left) and Ravi Ruia in Washington on Monday. Reuters
The Essar group, which struggled to keep its sprawling business empire afloat in India, said it plans to build a mega steel plant in the US that President Donald Trump dubbed the "largest plant in America by far".
The investment includes a proposed $15 billion integrated steel mill in Iowa, in addition to the existing $3 billion investment in the iron ore mine and pelletising facility in Minnesota. At an Oval Office event on Monday, Trump said the Mesabi Metallics, an Essar group company, will produce 10 million tonnes of steel a year, using iron ore from the Minnesota mines.
Flanked by commerce secretary Howard Lutnick and Ravi Ruia, founder and vice-chairman of Essar Group and his son Rewant, Trump said the investment would create 6,000 construction jobs and nearly 2,000 manufacturing and mining jobs. Steelmaking could begin by 2030
In a statement, Ravi Ruia cited Narendra Modi's "vision for a stronger India-US economic partnership, and our commitment to contributing to that vision through long-term investment, industrial growth and job creation".
At the Oval Office, Lutnick credited Trump's Section 232 tariff on steel as the driver for fresh investment in the US steel sector. Rewant Ruia, who reminded the audience of his US education, observed that the Iowa plant will produce "100 per cent American
steel".
Back home, Essar officials said the project is being bankrolled by US Exim Bank, which has offered up to $10 billion in support for the development of an iron ore mine and pellet plant. Pellets are an intermediate product used in direct reduced iron and electric arc furnaces that Essar plans to use to produce steel in Iowa.
While the group's global footprint gets a leg up, its India portfolio has shrunk considerably over the years. The group sold its Vadinar refinery to a Rosneft-led coalition to reduce debt burden, while the Hazira steel plant was acquired by ArcelorMittal-Nippon Steel (AMNS India) via insolvency. It also later sold power and port infrastructure to AMNS India to cut leverage.
Essar's big bet in the US drew sharp criticism from Congress leader Jairam Ramesh, who argued that private investment in India continues to struggle.