During a September 28 announcement in the Oval Office, US President Donald Trump unveiled a $15 billion steel megaplant in Iowa, standing alongside American officials and an Indian businessman, Ravi Ruia. Ruia co-founded the Essar Group, which owns Mesabi Metallics, the Minnesota-based firm responsible for constructing what is expected to become the United States’ largest steel mill.
However, Essar’s history is deeply intertwined with Russian energy. A decade prior, in October 2016, Ravi’s brother Shashi Ruia was photographed with Russian President Vladimir Putin during the signing of a landmark deal that would reshape their energy assets.
The conglomerate formerly owned Essar Oil, one of India’s largest private refineries, which it sold in 2016 for approximately $13 billion to a consortium led by Rosneft. The entity was rebranded as Nayara Energy. Today, Rosneft holds a 49 percent stake in Nayara, with another 49 percent held by United Capital Partners, a Russian asset management firm. Nayara operates under heavy sanctions from both the United States and the European Union due to Moscow’s war in Ukraine.
Despite these sanctions, Nayara continues to supply petroleum products to Russia during a domestic fuel crisis triggered by Ukrainian attacks on Russian oil infrastructure. The company retains rights to use the Essar brand at thousands of Indian petrol stations under a 99-year agreement.
The White House has championed the Iowa project as a significant economic victory ahead of the midterm elections, projecting the creation of at least 1,750 permanent jobs and up to 6,000 construction positions. First steel production is targeted for 2030, with Phase One expected to generate $95 billion in total economic impact over its first decade.
Commercial Secretary Howard Lutnick credited Trump’s 50 percent tariffs on foreign steel for enabling the project, stating, “Without those tariffs, this mine and steel plant doesn’t get built.” Trump echoed this sentiment, claiming the tariffs have revived the domestic steel industry.
Critics argue the deal highlights the difficulty the US faces in isolating Russia economically. The announcement comes days after Trump signed legislation authorizing up to 100 percent tariffs on nations purchasing Russian oil. India remains Russia’s second-largest oil buyer, having imported roughly 2.1 million barrels per day of Russian crude in August.
While there is no evidence that the steel project violates current US sanctions, Essar’s Russian connections have drawn scrutiny. Reports indicate that Essar moved a $3.9 billion loan from the sanctioned Russian bank VTB to Mauritius in 2022, allegedly to circumvent sanctions. Additionally, Essar faced legal challenges after SAP suspended services to Nayara, though a Delhi High Court order recently compelled the technology firm to restore operations.
The timing of the steel mill’s promotion has also raised questions given Trump’s low approval ratings and voter concerns over inflation. The project follows a pattern of leveraging investment for legal or political concessions; earlier this year, Washington moved to dismiss fraud charges against Indian billionaire Gautam Adani after he agreed to a $10 billion US investment.
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