Trump to unveil planned $15 billion Iowa steel project

By Jarrett Renshaw and Ernest Scheyder

Sept 28 (Reuters) - ‌President Donald Trump will announce ​on Monday ​a Minnesota company's plan to build a $15 billion steel mill in Iowa, a White House official said, giving the administration a marquee manufacturing investment to showcase as Republicans head into the November midterm elections.

Trump is expected to ‌unveil the project at the White House with executives from Mesabi Metallics, which recently opened Minnesota's first ⁠new iron ore mine in 50 years.

The announcement comes as Trump seeks to bolster his economic record ahead of November's midterms, with his Republican party confronting voter ‌concerns about inflation and the cost of ‌living. Trump has made tariffs and a revival of US manufacturing central to his economic agenda, arguing that higher barriers to imports will drive investment and jobs back to the United States.

The $15 billion steel project gives Trump a high-profile investment to tout ​as he makes that case to voters. It also comes as the administration faces pressure to show that its tariff policies can deliver industrial gains without adding to the prices of goods and fueling inflation.

The announcement was first reported by the Wall ⁠Street Journal.

Global steel markets have been sluggish in recent months due in part to overcapacity, particularly in China, and lackluster demand. In the US, however, steel prices have been ​higher because of trade barriers, boosting the appeal of domestic projects despite their high construction costs.

Trump imposed a 25% tariff on most imported steel during his first term, a levy that his successor, ​Democrat Joe Biden, largely kept in place.

NEW JOBS EXPECTED

The new project will ‌be fully vertically integrated, with Mesabi using iron ore from its Minnesota mine to produce steel in Iowa. The first phase will produce 7.5 million tons of steel annually, with the plant eventually expected ⁠to reach 10 million tons, which the White House described as the largest steel plant in US history.

The Mesabi steel project would use iron ore extracted from the company's mine in Nashwauk, Minnesota, roughly 250 miles from the Iowa border.

Mesabi is owned by Indian conglomerate Essar Group, which has invested more ⁠than $2.5 billion into the Minnesota mine.

Earlier this month, the US Export-Import Bank said it would finance $10 billion for the mine's expansion, and the bank's chairman, ​John Jovanovic, visited the site.

The Minnesota mine is expected to create about 350 jobs, while the Iowa steel plant is expected to create at least 1,750 permanent jobs, the White House official said. The first phase is also expected to support 5,000 to 6,000 construction jobs.

"President Trump is delivering ‌on his promise to rebuild American industry, reshore manufacturing, and create new jobs," White House spokeswoman Taylor Rogers said.

It was not immediately clear why Mesabi aims to build a steel mill in Iowa ‌using iron ore extracted from Minnesota.

The company was not immediately available to comment.

Power can be a major cost for steel producers, and commercial electricity prices ⁠in Iowa are marginally lower than in Minnesota.

The first ‌phase of the project is expected to ​generate $95 billion in total economic impact during construction and its first 10 years of operation, according to the White House. First steel production is expected in 2030.

(Reporting by Jarrett Renshaw; Editing by Colleen Jenkins, Nick Zieminski ‌and Andrea Ricci)

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