Why Here? Iowa's $15 Billion Steel Project Has No Confirmed Site. The Infrastructure May Tell Us Where It Lands.

President Donald Trump and Mesabi Metallics announced plans Monday for a $15 billion steel complex in Iowa, with about 1,750 permanent jobs and up to 6,000 construction jobs. The announcement left one basic question open: where the mill will actually be built.

"We haven't announced a final location decision for the facility yet beyond that it will be in eastern Iowa," Charles Sutton, chief development officer of Mesabi Metallics, said in an email to Location Decision. "We anticipate announcing a decision in the near future."

Early reporting has pointed to Lee County, in the state's southeastern corner, and U.S. Rep. Mariannette Miller-Meeks indicated on Facebook that the plant would go there. But Ginger Knisley, chair of the Lee County Board of Supervisors, cautioned in an interview with Location Decision on Tuesday against treating the county as the confirmed location. She said she's excited about what a project this size could bring, particularly expanded natural gas infrastructure, and that 1,700 permanent jobs would be a major event for almost any community. She did not say the project is headed to Lee County.

Emily Benjamin, president and CEO of the Lee County Economic Development Group, said in a statement to Location Decision that her group has "had a great working relationship with the Mesabi team." She also stopped short of confirming a site. "Out of respect for a company we hope to welcome as a long-term corporate citizen and partner in our region, we're not sharing more on location or project specifics than their team has shared at this time," she said.

Because the site isn't confirmed, the Location Decision Project Tracker doesn't yet list the project as a Lee County decision. Rather than start from an assumed site, we're asking what a site would need to make this project work.

Tommy J. Kurtz is managing director of Avident Advisors, the site selection and economic development consulting affiliate of law firm Jones Walker. A certified economic developer with nearly 30 years in the field, he worked on a $2 billion electric arc furnace steel project while leading business development for the Corpus Christi Regional Economic Development Corp. He called Mesabi's "not your usual project announcement." He doesn't claim inside knowledge of the company's search, and he told Location Decision he still can't say precisely why Iowa was chosen.

What he can describe is the scale of what a winning site has to deliver. A mill this size needs natural gas, large volumes of water, major electric capacity, rail and possibly barge access, a labor market that can fill about 1,750 jobs, and connections to both raw materials and customers.

Mesabi's supply starts at its new mine near Nashwauk, Minn., the first new iron mine in the state in roughly 50 years. A company executive described the Iowa complex as completing a "fully integrated American supply chain from mine to melt," CBS2 Iowa reported. The mill would turn direct-reduction-grade pellets into direct reduced iron and melt it in electric arc furnaces.

Kurtz said freight costs can make imported South American ore competitive for mills farther south, and Gulf Coast plants run on ore from Brazil, Peru and Chile. An Iowa mill fed from Minnesota changes that math. He also sees a central location as useful for reaching manufacturers in the Midwest and Upper South. Minnesota Republicans blamed their state's taxes and regulations for losing the mill. The company hasn't said why it chose Iowa over Minnesota.

Kurtz expects rail to carry much of the ore south, and BNSF serves southeast Iowa. If the site lands on or near the Mississippi, he said, the river "provides access for the iron ore from Minnesota but also access to water for processing." Whether barges would move finished steel or other materials is one of the questions we're reporting.

Electric arc furnaces draw heavy loads. Based on comparable projects, Kurtz expects the mill's eventual demand to run in the hundreds of megawatts. Mesabi hasn't disclosed its load, and we're working to identify the utilities involved. A requirement that size would put the project in the same line as data centers and other power-hungry developments competing for grid capacity, where the deciding question is who has power available and how soon they can deliver it.

Kurtz said comparable steel and iron projects can use millions of gallons of water a day, depending on design and scale. Mesabi's water needs aren't public. A site on the Mississippi would matter for water as well as freight.

Direct reduction also runs on natural gas. Gov. Kim Reynolds has said a natural gas pipeline will be extended to the plant, Radio Iowa reported, and Knisley named gas infrastructure as one of the benefits she's watching. Some of what the mill needs to run may not exist yet.

Reynolds has called lawmakers back to Des Moines on Friday, Oct. 2, to make what her office calls "reasonable and limited updates" to the state's Major Economic Growth Attraction program. The terms haven't been released. Commerce Secretary Howard Lutnick, asked whether the project depends on state tax breaks, said, "I think this deal is done." Knisley pointed to the session as the next thing to watch.

Kurtz said packages for large industrial projects often put public money into roads, utilities and other infrastructure that makes a project possible, rather than cash to the company. He said he doesn't know how Iowa's package will be structured, but infrastructure is where he would look first. Those line items could offer some of the best clues yet about where the mill will land.

If the mill lands in southeast Iowa, its labor pool won't stop at the state line. Illinois sits across the Mississippi and Missouri lies to the south, and Kurtz flagged that three-state reach early as a possible advantage. Reynolds called the area "one of the most depressed regions of Iowa." Benjamin said projects of this scale "raise important questions about workforce, infrastructure, housing, and community services," and that her group's job is to make sure the growth benefits people who live and work in the region. A three-state labor pool still isn't a staffing plan. We're reporting where skilled workers would come from, how far they'll commute, which occupations Mesabi needs and what training and housing will have to be in place before production begins in 2030.

Kurtz noted that Mesabi has discussed producing specialized steel for defense manufacturing. He recently presented research on the revival of U.S. shipbuilding and the modular manufacturing work it could bring to the Midwest and Great Lakes. His question, which we're now reporting, is whether Iowa is being positioned as a central supplier to a growing domestic defense and advanced-manufacturing base, beyond a place to make steel. We haven't reached that conclusion.

The investment is $15 billion. The first phase is sized at 7.5 million tons of steel a year, according to Iowa Capital Dispatch, and the president put the figure at 10 million tons. Minnesota ore is central to the company's strategy. The project will need large amounts of power, water, gas, transportation and labor. And Iowa lawmakers return Friday to change a major economic development program.

Still unknown:

We reached out to the Iowa Economic Development Authority for comment.