President Donald Trump announced from the Oval Office on Monday that Mesabi Metallics, a Minnesota-based company owned by India’s Essar Group, will build a $15 billion steel plant in Lee County, Iowa, which the White House said would be the largest steel plant in U.S. history.
Essar’s energy arm, sold in 2016 to a Russian-led consortium, is now half-owned by Russian gas producer Rosneft and remains under European Union sanctions over Moscow’s war in Ukraine, according to reporting by Al Jazeera.
Trump was joined at the announcement by Mesabi Metallics Chairman Rewant Ruia, his father and Essar cofounder Ravi Ruia, Commerce Secretary Howard Lutnick and Export-Import Bank Chairman John Jovanovic. “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.
The Iowa plant is part of an $18 billion investment that also includes about $3 billion for an iron ore mine in Minnesota’s Mesabi Range, according to the White House. The complex is expected to produce 7.5 million tonnes of steel a year at first, rising to 10 million tonnes, with production starting in 2030.
The project is projected to create 1,750 permanent jobs and up to 6,000 construction jobs, and to generate $95 billion in economic impact over its first decade of operation, the White House said. The Export-Import Bank said it would provide up to $10 billion in financing for the expansion.
“Without those tariffs, this mine and steel plant doesn’t get built.”
Lutnick told reporters the project showed the effect of steel tariffs Trump imposed on foreign imports. “These are your 232 tariffs, the steel tariffs at work,” he said. Trump said the tariffs, set at 50% on foreign steel since early in his term, were driving companies to build in the United States. Ravi Ruia thanked Trump “for standing behind American investment and American industry and for making this possible.”
Essar’s Russian ties
Essar Oil, the group’s former refining arm, was heavily indebted and listed as a defaulter by India’s central bank when Prime Minister Narendra Modi helped broker a deal in 2016 under which Rosneft and Russian investment firm United Capital Partners bought the Vadinar refinery for nearly $13 billion, according to Al Jazeera. The refinery was renamed Nayara Energy, with Rosneft and United Capital Partners each holding a 49% stake and Essar retaining rights to its branding for 99 years.
The European Union placed Nayara under sanctions in July 2025 as part of its 18th sanctions package targeting Russian oil revenue, citing the refinery’s status as Rosneft’s largest in India, according to the EU measures reported by Al Jazeera and Indian outlet Bar & Bench. The sanctions bar the import of fuel refined from Russian crude and restrict Nayara’s access to EU shipping insurance and financial services.
Nayara has since relied almost entirely on Russian crude and, in July, sold petroleum products to Russia as Ukrainian strikes on refineries triggered fuel shortages there, Al Jazeera reported. The sanctions also prompted German software firm SAP to suspend services to Nayara; the Delhi High Court ordered SAP’s Indian unit to restore them this month, ruling that SAP “cannot take advantage of these unproven EU sanctions to argue that the performance of contract has become impossible,” according to the court’s order. A final ruling in the case is pending.
Separately, a joint investigation published in April by The Guardian and the journalism platform SourceMaterial found that Essar shifted roughly 2.35 billion euros in loans from the Kremlin-linked bank VTB to a subsidiary in Mauritius after VTB was sanctioned in February 2022, avoiding restrictions that applied in Cyprus, where the loans had previously been held. Essar said it took “detailed advice from leading sanctions lawyers across all relevant jurisdictions” before the move and that UK sanctions law did not apply to the transaction. Authorities in Cyprus are examining whether the restructuring breached EU sanctions rules, a finance ministry spokeswoman said, according to the investigation.
There is no evidence that Essar or the Mesabi Metallics investment has violated U.S. or EU sanctions, and Essar itself is not under sanctions; only Nayara, in which Essar no longer holds a stake, is designated. The U.S. State Department said in 2016, when the Rosneft deal was struck, that it saw “no violation of any US-EU sanctions stemming from this deal,” spokesperson Mark Toner said at the time.
Timing
The Iowa announcement came 10 days after Trump signed the Lindsey O. Graham Sanctioning Russia and Iran Act, which requires him to impose tariffs of up to 100% on the largest importers of Russian oil and gas, with exceptions and waivers at his discretion. India is Russia’s second-largest oil buyer.
The announcement also came weeks before the Nov. 3 midterm elections, in which Trump’s Republican Party is defending competitive races amid low approval ratings tied to inflation and the cost of living. Trump said he plans to visit Iowa for a rally ahead of the vote.