Tuesday, October 30, 2007
The Essar Group closed Monday on a deal to buy Minnesota Steel, planning to begin construction on a steel mill near Hibbing early next year -- a project that Pawlenty said holds great promise for the state of Minnesota. But later in the week, federal officials contacted the governor to inform him of Essar's possible ties to Iran.
Reuters reports that Essar plans to begin work on an $8 billion to $10 billion oil refinery in Iran early next year, working with the National Iranian Refining and Distribution Co. Such a deal may constitute or lead to business practices that are prohibited by the U.S. government. Pawlenty said Essar officials have confirmed talk in Iran, but say they do not have any commitments there.
If the federal government finds Essar's actions in Iran to be a violation of U.S. policy, Pawlenty said he would withdraw his support for the company's planned steel mill on the Iron Range.
The deal includes $30-60 million in state money for the Iron Range, and potentially scotching the deal has got the Ranger Mafia up in arms.
"It never ceases to amaze me how this governor can change his mind from one day to the next. It's frustrating that a project we've been working on for seven years is finally picked up on by the Twin Cities media a couple of days ago when the governor says it's going to be a good deal for the Range and state. Then days later, a complete reversal," said state Rep. Tom Rukavina, DFL-Virginia, in a telephone interview Sunday evening. ...What on earth does that mean, "we're Rangers"? We're used to getting our way? We're used to getting easy money from the state?
"I was stunned. This is so extraordinary. We were told the meeting with Essar went well (on Thursday) and then he gets back to Minnesota and immediately draws this line in the sand. I find it puzzling," said state Rep. Tom Anzelc, DFL-Balsam Township.
Anzelc said he had been out at some hunting shacks talking to some guys prior to next weekend's opening of the deer firearms season and had also been to an anniversary party.
"People are puzzled. But they're still upbeat. After all, we're Rangers," he said.
So while the governor says "There are certain things in life that are more important than a steel mill," the Rangers think that trading with a company that deals with Iran is no big deal. All of a sudden, Rangers like globalization.
As to whether there should be a concern of a potential new corporation on the Iron Range and in Minnesota would have dealings with Iran, Anzelc said, "Sure it's a concern. But it's a concern that will always be there when you are engaging in a global economy with a very tense geo-political situation.You know what? Give me a search warrant and fifteen minutes, and I bet I can find items from China and Pakistan in Rep. Rukavina's home.
"We can't control all the countries of the world and all their actions. Essar is a company from India interested in building a steel mill using our iron ore because it's a steel company that has a market. Our traditional domestic steel interests don't have those interests available. That's why it's Essar," he said.
"Let's look at China. It's the largest communist country in the world with the third largest army. But we're sending them plenty of materials and they're sending back a lot of cheap goods that people buy ... not me. Look at Pakistan. Every T-shirt you see is made there and they're sheltering Osama (bin Laden, the architect of the 9-11 terrorist attacks that killed about 3,000 people in the United States). And we're worried about India building a refinery?" Rukavina said.
But this isn't just trading any ol' thing. This is a refinery. One of the real possible places where the U.S. has leverage with Iran would be a military strike on the one refinery the country has. Iran would like very much to have another refinery to reduce that pressure; U.S. interests are clearly in keeping this from happening via peaceful means. Why the state of Minnesota should give money to that company that helps them build the plant is quite beyond my reasoning skills, but I'm no Ranger.