Made in America, owned by India: Essar's $15 billion Trump-era steel bet

TOI Correspondent from Washington: India’s Essar Group found itself at the center of MAGA supremo Donald Trump’s “America First” industrial push on Monday after the US President announced a planned $15 billion steel plant in Iowa, calling it the largest steel plant in American history.“Today, we’re thrilled to announce that Mesabi Metallics will be building the largest steel plant in American history in the great state of Iowa,” Trump said at a surprise White House event, flanked by Essar chairman Rewant Ruia and other executives.The proposed plant, to be built by Essar-owned Mesabi Metallics, is expected initially to produce about 7.5 million tons of steel a year, potentially rising to 10 million tons, and create about 1,750 permanent jobs. Another 5,000-6,000 jobs are projected during construction, with first production targeted for 2030.For the MAGA boss, the announcement is another showcase for his claim that tariffs and his “America First” policies are pulling manufacturing and investment back into the US For Essar, it represents an extraordinary second act for an American project that has been almost two decades in the making.While the Mesabi announcement highlighted Trump’s drive to bring back manufacturing, particularly of steel, back to America, its backstory is much older than the MAGA boss’ current industrial campaign. The project began with Minnesota Steel Industries in the early 2000s and was acquired by Essar in 2007. The company envisioned an integrated mine, pellet plant and steel operation that would turn Minnesota ore into American steel.But the project suffered financing and construction problems, missed deadlines and eventually entered bankruptcy in 2016. Minnesota terminated Essar's mineral leases, while contractors and public authorities were left with substantial claims. The project was subsequently restructured and taken over by Mesabi Metallics, with Essar eventually returning to the financing structure. The mine now beginning operations is therefore the culmination of a roughly 20-year industrial saga, not a project suddenly conceived or negotiated by Trump.Still, Trump’s role is nevertheless significant in that his tariffs have altered the economics of imported steel, while the US Export-Import Bank has offered as much as $10 billion in financing support for the Mesabi operation. “Without those tariffs, this mine doesn’t get built and this steel plant does not get built,” commerce secretary Howard Lutnick asserted during the announcement.For Essar, meanwhile, the Iowa plan marks another ambitious chapter in a remarkable Indian corporate journey. Founded by brothers Shashi and Ravi Ruia in 1969, Essar grew from a construction and engineering company into a sprawling industrial conglomerate spanning steel, oil, energy, shipping and infrastructure, becoming one of India's most aggressive global investors, accumulating major assets in Britain, North America and elsewhere. But its expansion also brought heavy debt and restructuring. Essar eventually sold its Indian steel business to ArcelorMittal-Nippon Steel and its oil business to Russia's Rosneft, transactions that helped reshape the group and reduce its Indian bank debt.Its first American steel venture left a more complicated legacy. Minnesota critics continue to point to the 2016 bankruptcy, missed commitments and public infrastructure spending as evidence that the state paid a price for Essar's failure to deliver. There is also a striking political irony in Monday's announcement. Some of the more extreme nativist voices on the American right have attacked the project precisely because its owner is Indian, warning — without evidence — that an Essar-owned steel mill means an influx of H-1B workers or the outsourcing of American jobs.Republican leaders nevertheless embraced the announcement. Iowa Senator Chuck Grassley called it “GR8 NEWS,” describing the project as a “HUGE investment” that would bring about 1,700 good-paying jobs. House Majority Leader Steve Scalise declared: “AMERICAN STEEL IS BACK!” citing the $15 billion investment and eventual 10 million tons of production.There is, fittingly, a piece of Minnesota cultural history embedded in the story. The great singer-songwriter and Nobel laureate Bob Dylan was born in Duluth and grew up in Hibbing, in the Iron Range whose fortunes were built on iron ore. In 1963, he wrote “North Country Blues,” a haunting account of a mining community emptied as the iron-ore economy collapsed.Nearly six decades later, Minnesota's mines are producing again, and Essar's ore is intended to travel south to feed a new American steel industry in Iowa.Trump is betting that this time, the red ore will keep moving, into a steel mill that, if Essar delivers on its promise, will begin making American steel in 2030.You use AI every day. Now get your AI Quotient. Take the AIQ test.