Ahead of the all-important midterms, US President Donald Trump has said that a Minnesota-based company plans to build a multi-billion-dollar steel mill in Iowa, handing his administration a marquee manufacturing investment that the party will likely use as an election talking point.
Trump unveiled 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 White House said the plant investment would amount to USD 15 billion.
The Mesabi steel project would use iron ore extracted from the company’s mine in Nashwauk, Minnesota, roughly 250 miles from the Iowa border. Indian conglomerate Essar Group owns Mesabi and has invested more than USD 2.5 billion in the Minnesota mine.
The plant is expected to create at least 1,750 permanent jobs, the White House said.
“The first phase is also expected to support up to 6,000 construction jobs,” it added further.
Talking about the Republicans using the news as an election talking point, Trump seeks to bolster his economic record ahead of November’s midterms, with his approval rating plumbing all-time lows of late, amid voters’ dissatisfaction over the rising inflation and the cost of living.
Trump has, however, been relentless on his tariff agenda, tying the topic with the revival of US manufacturing, arguing that higher barriers to imports will drive investment and jobs back to the world’s largest economy.
In Iowa, Republicans are currently facing several competitive elections.
Iowa, which got transformed from a swing state to a Republican bastion recently, will see a tight race for a seat in the US Senate, as well as its gubernatorial race, where the Democratic candidate, Rob Sand, has led most polls.
The USD 15 billion steel project gives Trump a high-profile investment to tout as he makes that case to Iowa voters while campaigning for the Republican candidate.
“The project is a tremendous investment. Our steel industry is roaring back to life,” Trump said in the White House’s Oval Office while making the announcement.
While global steel markets have been sluggish due to overcapacity, particularly in China, and lackluster demand, in the US, 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.
As per the CBC News, the American steel manufacturer Cleveland-Cliffs is idling some production activities at its Hamilton, Ontario, plant in Canada and will lay off hundreds of workers, citing damage from the tariffs.
Mesabi will fully vertically integrate the new project by 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 US Export-Import Bank has already committed to finance USD 10 billion for the mine’s expansion.
“The first phase of the project is expected to generate USD 95 billion in total economic impact during construction and its first 10 years of operation,” the White House commented.
First steel production from the plant will start in 2030.