As US President Donald Trump announced a $15bn steel megaplant while seated at his Oval Office desk on Monday, he had a lineup of mostly US politicians standing behind him – from cabinet members to elected representatives from Iowa, where the mill is to be built. There was one exception: an Indian man with a receding hairline and a lilac pocket handkerchief, standing behind the US president’s right shoulder. Ravi Ruia is a cofounder of the Essar Group, which owns Mesabi Metallics, the Minnesota-based firm that’s building the steel mill, which is expected to be the United States’s largest once it is complete.
A decade earlier, in October 2016, his brother Shashi was in the photo frame with a different president during the signing of another major deal: Russian leader Vladimir Putin. Steel and metallics aren’t Essar’s only association with minerals and natural resources. The conglomerate had been involved for years with oil, before it sold one of India’s largest private oil refineries to a Russian-led consortium in 2016 for nearly $13bn.
Essar Oil was rebranded as Nayara Energy. Today, Nayara Energy is half-owned by Russian gas major Rosneft, which is under heavy US and European sanctions over Moscow’s war on Ukraine. Nayara has also emerged as a supplier of petroleum products to Russia at a time when the country is facing a fuel crisis following multiple Ukrainian attacks on its oil and gas depots.
And as part of a 99-year deal, Nayara is continuing to use Essar’s branding in India, where the company runs thousands of petrol stations. Nayara is under European Union sanctions. The White House is touting the Iowa steel project, unveiled just before the US midterm elections, as a major economic win for Americans, promising hundreds of jobs and billions of dollars in revenue.
And there is no evidence that the steel project is in violation of any Russia-specific US sanctions. But Trump’s announcement of a mega project with an Indian firm closely tied to Russian investments under Western sanctions underscores how the US has struggled to isolate Moscow economically despite an unprecedented economic pressure campaign. And the timing of the steel mill announcement raises questions, because it comes days after Trump signed a law that empowers him to punish countries that buy Russian oil with up to 100 percent tariffs.
India is Russia’s second-largest oil buyer. But the legacy Indian conglomerate that best epitomises the country’s links to Russian energy is now also behind the US’s biggest steel factory. The new project would integrate its iron ore mining operations in Minnesota’s Mesabi Iron Range with the upcoming steel complex in Iowa.
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