The facts
President Donald Trump announced on Monday, Sept. 28, that Mesabi Metallics plans to build a $15 billion steel plant in southeast Iowa's Lee County, hailing it as "the largest steel plant in American history." The White House says the project will require 6,000 construction workers over the next four years and employ about 1,750 workers when the factory starts producing.
Mesabi Metallics is owned by the Mumbai-based Essar Group, founded by brothers Sashi and Ravi Ruia. The Ruias' two-decade quest to build a North American steel empire has faced multiple bankruptcy filings, accusations of broken contracts, missed deadlines and stiffed contractors.
The Minnesota chapter: Essar Steel Minnesota filed for bankruptcy protection in July 2016, owing creditors about $1.1 billion, according to the Mesabi Daily News. A California-based private investment fund that took over the company sued Essar Global, accusing the Indian company of diverting about $500 million in funds intended for the mine to other businesses, according to the Mesabi Tribune. In Canada, Essar Steel Algoma filed for bankruptcy protection in November 2015; a court-appointed monitor accused Essar Global of billing the steel plant $9 million for a corporate jet that the Algoma company never used, as well as $7.5 million for New York City office space and residential property. Essar Global spokespeople denied the allegations in both Minnesota and Canada. In India, Business Today reported that the Essar Group was one of the country's most indebted companies and "notorious" for defaults dating back to 1999, when Essar Steel failed to pay $250 million to international creditors.
Then the money. After selling tens of billions in assets, the Ruias received a large loan from a Russian state-owned financial institution. Rosneft Oil Co., a Russian state-owned energy operation, paid Essar Global about $12.9 billion in 2017, according to Reuters. By 2020, the Essar businesses' debt to VTB, a Russian state-owned bank, had increased to $2.35 billion, according to the Guardian. Following Russia's invasion of Ukraine in February 2022, the UK, European Union and other countries sanctioned VTB. Essar Energy did not apply for a UK permit to repay debts to a sanctioned entity; instead, the Cyprus entities transferred loans to a subsidiary in Mauritius, where the sanctions against Russia do not apply. Sanctions expert Michael Ruck told the Guardian the transfer "raises red flags in relation to potential sanctions circumvention." The Cyprus government is investigating whether the transfer was a "violation of EU sanctions regulations." The company's attorneys said suggestions of circumvention are "without foundation."
Meanwhile, on Sept. 24, four days before Trump's announcement, the U.S. Export-Import Bank approved a $770 million loan to Mesabi Metallics, according to CBS News. The company has also hired several lobbyists, including former Trump adviser Jason Miller.
Iowa Gov. Kim Reynolds, who said the plant is "the most consequential economic development opportunity ever for our state," scheduled a special legislative session to consider tax incentives for the project.
Minnesota has already run this experiment. When the company failed to meet the state's demand to show $200 million in a Mesabi Metallics bank account by a May 2021 deadline, the Minnesota DNR withdrew the lease covering about 39% of the area Mesabi Metallics planned to mine, and the Minnesota Executive Council awarded the lease to Cleveland-Cliffs in May 2023. A DNR spokesperson said the Essar Group was not a "credible miner," and Gov. Tim Walz said the company's problems with the mine had caused "incredible heartache" in the Iron Range.
The company pushes back: spokesperson Jesse Harris told the Des Moines Register that Mesabi Metallics is "well positioned to fund and develop the Iowa steel plant," that its parent companies have invested about $2 billion, and that "Mesabi Metallics does not have any relationship with sanctioned entities."
Our take
Donald Trump is a fucking carnival barker, and his latest miracle product is a $15 billion steel plant from a company whose entire business model is setting money on fire and blaming the ashes on creditors. The cunts behind this, the Ruia brothers, have left a trail of bankrupt, looted companies across two continents like a pair of dysentery-ridden pigeons. They are professional grifters, and Trump just held a press conference to polish their latest turd.
Let's be clear: this isn't a steel company. It's a money-siphoning operation with a side-hustle in not mining anything. In Minnesota, they bankrupted a project owing $1.1 billion and allegedly diverted half a billion dollars meant for a mine. In Canada, they billed their own bankrupt steel plant $9 million for a corporate jet it never fucking used. That's next-level parasitic. It's like charging your dying patient for an ambulance ride you never gave, then selling the ambulance.
Their financing is a sanctions-circumvention wet dream. After racking up a $2.35 billion debt to VTB, a sanctioned Russian state bank, they shuffled the loans through Cyprus to fucking Mauritius to dodge the rules. An expert called it a red flag; Cyprus is investigating; their lawyers said it's "without foundation," which is corporate-speak for we're guilty as sin, but we hired a prick with a nice suit.
And the U.S. government's response? Four days before Trump's suck-off session, the Export-Import Bank approved a $770 million loan to these clowns. They hired Trump's own bagman, Jason Miller, to grease the wheels. Now Iowa's governor is calling a special session to shovel tax incentives into this black hole. She called it the "most consequential economic development opportunity ever" for Iowa. No, you dumbass, the only thing consequential here is the sheer volume of bullshit you're willing to swallow.
Minnesota already kicked these frauds to the curb. The state's DNR said they weren't "credible miners" and took their lease away when they couldn't prove they had $200 million in a bank account. Now their spokesperson says they're "well positioned" and have no relationship with sanctioned entities. That statement is worth less than the $9 million phantom jet they invoiced. This whole project is a monument to graft, a monument that will never be built. It's a fucking fantasy for suckers, and Trump is the head sucker in charge.
