Mesabi Metallics plans to build a $15 billion steel complex in Iowa that will use iron ore pellets from the company’s mine in Nashwauk, Minnesota. The plant is expected to begin production in 2030 with annual capacity of about 7.5 million tons of steel, eventually reaching 10 million tons, a White House official told CNBC.
Mesabi, backed by India’s Essar Group, expects the Iowa plant to employ at least 1,750 people and support up to 6,000 construction jobs. The company is investing another $3 billion to complete the Minnesota mine, bringing the combined investment to $18 billion. Iowa Rep. Mariannette Miller-Meeks disclosed the plant is coming to Lee County.
The plant will turn the pellets into direct-reduced iron, removing oxygen from the ore before feeding the hot iron into electric arc furnaces with scrap steel. Mesabi chairman Rewant Ruia described the supply chain as “American ore carried on American railroads,” per Canary Media.
Mesabi’s Minnesota mine and pellet plant began operations this month and is expected to produce up to 7 million tons of pellets a year. The Export-Import Bank approved a $770 million loan for the mine and said it could provide up to $10 billion in financing for Mesabi’s expansion. Essar’s earlier company at the site, Essar Steel Minnesota, filed for bankruptcy in 2016 with the mine half-built.
Steel imports fell 29.5% through April under the 50% Section 232 tariff, which the US doubled last summer. Hyundai Steel broke ground last month on a $5.8 billion Louisiana mill that uses the same direct-reduced iron and electric arc furnace process, while Nucor expects to finish commissioning its $4 billion West Virginia sheet mill by the end of the year.
US iron and steel producers ran at 73.4% of capacity in August, down from 75.2% in June, Federal Reserve data show.
