The U.S. government is now the largest lender to Essar’s Minnesota mine. It has not said where that loan ranks against a senior private credit and a royalty already sold on the mine’s revenue. The $15 billion Iowa mill the mine is meant to feed has no published funding plan. Commerce says neither project exists without steel tariffs.
A 2017 refinery sale to Russian state-linked buyers, one of them partly owned by Qatar’s sovereign wealth fund, reset Essar’s finances. The $770 million EXIM loan closed the mine. What the announcement left out is the stack, the people, and the record between those two points.
President Trump announced plans for what he called the largest steel plant in American history, a $15 billion mill in eastern Iowa. It will be built by Mesabi Metallics, owned by India's Essar Group, and supplied by a new iron mine in northern Minnesota. Four days earlier, the U.S. Export-Import Bank approved a $770 million loan to Mesabi.
The announcement left out five things that are in the public record and in my employment-history data.
- The federal loan was filed as an export deal. EXIM's notice in the Federal Register lists the mine's iron pellets as the export and says they will be used domestically and exported. EXIM has not said what share will go abroad.
- Mesabi laid out a Minnesota expansion two weeks before the mill went to Iowa. On Sept. 15, Mesabi's CEO presented a $5 billion Minnesota expansion to the Itasca County Board. At the same meeting, he said other states "are more competitive" on incentives. On Sept. 28, the $15 billion mill was announced for Iowa, where lawmakers were weighing a special session on an incentive package one state senator put at half a billion dollars.
- The U.S. government is now the mine's largest lender. EXIM's $770 million direct loan is larger than any private piece of the financing, and its terms, including where it ranks for repayment, have not been published.
- Mesabi's salaried staff has fallen as its money arrived. Tracked salaried staff is down about 15% since February, over the same months Mesabi closed its financing, started production and was named builder of the Iowa mill. More than a quarter of its tracked hires came from Cleveland-Cliffs or a Cliffs-operated mine, the company Mesabi is suing in federal antitrust court.
- Mesabi sold part of the mine's future revenue before it produced anything. A royalty company paid $265 million in cash and shares for a share of the mine's revenue, and Macquarie lent money to both Mesabi and that royalty company.
Essar's earlier steel ventures in Canada, Minnesota and India all ended in creditor proceedings.