Essar Plans $15 Billion Iowa Steel Plant as Part of $18 Billion US Investment

Essar Group-backed Mesabi Metallics is planning an $18 billion investment in the United States, with the bulk of the money going towards a new steel complex in Iowa. 

Invest in Indian Markets and Unlock Future Potential With 5paisa!

Open Account Now

The plan includes $15 billion for the Iowa steel plant, while about $3 billion is being invested in an iron ore mine and pelletising facility in Minnesota. The project was announced at the White House in the presence of US President Donald Trump, Essar Group founder and vice-chairman Ravi Ruia and Mesabi Metallics chairman Rewant Ruia. 

Once operational, the Iowa plant is expected to produce around 10 million tonnes of steel annually and employ at least 1,750 people. Production is expected to begin by 2030. 

The project will also rely on iron ore from Mesabi Metallics’ development at Nashwauk in Minnesota’s Mesabi Iron Range. That mine is expected to produce about 7.5 million tonnes of iron ore a year and employ roughly 350 people when fully operational. 

The Minnesota facility is expected to supply direct-reduction-grade iron ore pellets to the Iowa plant. This would connect the mining and steelmaking operations within the US rather than treating them as separate projects. 

Mesabi Metallics expects the wider project to create more than 8,000 construction jobs. It has also estimated that the investment could generate $95 billion in economic output during construction and the first decade of operations. 

The Minnesota project is expected to become the first new iron ore mine built in the US in 50 years, according to the company and the White House. 

For steel production, the Iowa complex plans to use direct-reduced iron and electric arc furnace technology. Mesabi Metallics expects this approach to consume less energy and produce lower emissions than conventional blast furnace steelmaking. 

The investment comes as the US pushes for more steel to be produced domestically. The country currently has a 50% tariff on imported steel, with the Trump administration using tariffs as part of its effort to encourage manufacturing investment within the US. 

For Essar, the project adds another large international investment to its portfolio. Founded in India in 1969, the group has interests across energy, infrastructure, metals and mining, and technology and retail. Essar says it has invested more than $30 billion across its businesses globally.