Plans to build a $1.6 billion plant in Minnesota's Iron Range are back on track after Minnesota's Governor Tim Pawlenty said he has been assured that the Indian steelmaker behind the project, Essar Global Ltd., will not conduct prohibited business with Iran.
Reports surfaced last week that Essar was considering investing in a multibillion dollar oil refinery project in Iran, which led Gov. Pawlenty to threaten to withdraw state backing from Essar's Iron Range project due to worries that the firm's alleged deal with Iran would be in violation of the Iran Sanctions Act, a law prohibiting companies that invest more than $20 million in one year in Iran's energy sector from doing business with the US.
Essar responded to the Governor's concerns in a letter stating that it would not engage in the deal with Iran.
"They have clarified their intentions in a way that satisfies my concerns regarding what would otherwise be a problematic investment in Iran," Gov. Pawlenty told press.
Gov. Pawlenty released a letter from Essar dated Wednesday that said that while it has considered investing in Iran's oil industry, "no investment or firm commitment will be made in Iran, unless and until permitted to do so under the applicable US or international laws."
The Governor said he will include infrastructure funding for the Iron Range project in his 2008 bonding bill. Construction of the mill should start next spring.