Indian company Essar Global Ltd.'s ties to Iran may jeopardize the company's plans to participate in the US-based Iron Range project.
Last Sunday, Minnesota's Governor Tim Pawlenty threatened to withdraw the state's support for Essar's plans to build a $1.6 billion steel mill project on the Iron Range after learning that the company also plans to engage in an $8-to-$10 billion oil refinery in Iran.
The implementation of the project that Gov. Pawlenty once called a promising investment in Minnesota may see opposition from the state if the federal government finds Essar's investment in Iran to be in violation of US policy.
Gov. Pawlenty said he will not lend state backing to the project if Essar is violating the Iran Sanctions Act, which gives the US government power to punish foreign companies with interests in the US if they invest more than $20 million in Iran's energy sector in one year.
The Governor is currently seeking more information from federal government officials, including Secretary of State Condoleezza Rice and US Ambassador to India, David Mulford, to determine whether Essar is in violation of the Act.
Essar officials have not yet commented on their involvement in the refinery project.
"My sincere hope is that Essar will come out shortly and clarify their intentions and say they are not going forward with the refinery project," Gov. Pawlenty told press Monday.
Gov. Pawlenty did not learn of Essar's interests in Iran, which he calls a terrorist state, until the company completed its acquisition of Minnesota Steel last week.
Essar finalized its acquisition of Minnesota Steel last Monday and plans to begin the construction of a steel mill near Hibbing, Minnesota early next year.