Investigation Probes the Involvement of Prominent Russian Oligarchs in the Financing of the Project
An investigation into the company behind the proposed mill raises questions about Russian oligarchs, outstanding debts, and the protection of public funds.
The proposed $15 billion Iowa steel mill promises thousands of construction jobs and at least 1,750 permanent positions. But a September 29 investigation by Al Jazeera reveals that Essar Group, the Indian conglomerate behind the project, has extensive financial connections to Russia, including dealings with institutions and investors associated with sanctioned Russian businessmen.
The connections do not establish wrongdoing by Essar or the Iowa project. They do, however, raise questions that deserve answers before Iowa commits substantial public resources to the development.
Following the Russian Money
Essar Group owns Mesabi Metallics, the Minnesota-based company developing the Iowa mill. According to Al Jazeera, Essar received substantial financial assistance through Russian transactions while struggling with debt.
In 2016, Russian oil giant Rosneft and a consortium of investors purchased Essar’s oil business for approximately $12.9 billion. The transaction helped Essar address its debts. Russia’s VTB Bank also provided the conglomerate with a $3.9 billion debt-restructuring loan.
Potential involvement of Russian oligarchs
Those transactions connect Essar to two prominent figures in Russia’s financial establishment. Andrey Kostin chairs VTB, the Russian state-controlled bank that provided Essar with financing. The United States sanctioned Kostin in 2018, and the U.S. Department of Justice has identified him as a Russian oligarch.
And Ilya Shcherbovich, founder of Russian investment firm United Capital Partners, was involved through his company’s participation in the purchase of Essar Oil. The European Union sanctioned Shcherbovich in 2026.
Essar’s former oil business, now known as Nayara Energy, remains predominantly Russian-owned and is itself subject to EU sanctions.
Scrutiny of Russian financial connections
The Russian financial connections have attracted scrutiny beyond the Iowa project. An April 2026 investigation by The Guardian and SourceMaterial reported that Essar moved billions in VTB loans to Mauritius following sanctions against the Russian bank. Essar maintains that its restructuring complied with applicable law.
Neither investigation establishes that Kostin, Shcherbovich or their organizations own or are financing the proposed Iowa steel mill. Al Jazeera also reports no evidence that Essar or the project has violated U.S. sanctions.
What Iowans Deserve to Know
The proposed steel mill could bring significant economic benefits to Iowa. But the company’s financial history raises questions about the project’s financing, particularly if public incentives are involved.
Who is financing the Iowa mill? Are any sanctioned Russian institutions or investors directly or indirectly involved?
Does Essar still owe money to VTB? If so, could those obligations affect the financing or operation of the Iowa project?
What financial scrutiny has been conducted? Have federal and Iowa officials examined Essar’s ownership, outstanding debts and sanctions exposure?
How will taxpayers be protected? What safeguards would apply to any public financing or tax incentives if the project is delayed or fails to deliver its promised jobs?
The White House has projected at least 1,750 permanent jobs and up to 6,000 construction jobs. Those potential benefits are substantial, but the project’s financial structure and any public commitments warrant scrutiny.
Have Iowa officials fully examined potential financial risks?
The issue is not whether an Indian company with past Russian business relationships should be permitted to invest in Iowa. It is whether officials have fully examined the financial risks and whether Iowans have been given the information needed to understand any public investment in the project.
A $15 billion announcement is not a substitute for financial transparency.
Further reading
Trump bank accounts closed due to money laundering concerns
Al Jazeera’s investigation of Essar’s Russian connections
The U.S. Justice Department’s announcement concerning Andrey Kostin.
Please note: The charges against Kostin are allegations, not convictions.
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