Posted 2/24/2014 12:00 am
Updated 9 months ago
A year after the highly publicized announcement that a $1.1 billion steel mill was coming to Mississippi County, economic development officials say the project is moving forward despite a rival’s objections.
Grant Tennille, executive director of the Arkansas Economic Development Commission, said last week that he expects Big River Steel LLC to close on financing for the plant in June.
In addition, Tennille said, Big River has begun to let some construction contracts out for bid, including to Arkansas companies.
Clif Chitwood, Mississippi County’s economic developer, recently returned to the state after a trip to Germany where he and a team from Arkansas Northeastern College visited with SMS Siemag AG, the company that will be providing much of the actual steelmaking equipment. The meeting’s purpose was to begin coordination efforts on training for the people who will operate the SMS equipment once it’s installed at the finished Big River plant.
On Jan. 29, 2013, Gov. Mike Beebe, AEDC officials and steel mill impresario John Correnti excitedly announced plans for Correnti’s company, Big River Steel LLC, to build a mini-mill near Osceola. The mill is to employ 525 people earning average yearly compensation of $75,000, in addition to the hundreds, if not thousands, of workers hired to build the massive project. At that time, construction was expected to begin in late 2013.
But last fall Nucor Corp., which has two steel plants in Mississippi County, objected to the air quality permit granted Big River by the state. That led Big River to delay construction. Correnti said the company couldn’t proceed without the permit.
Late last month, however, the Arkansas Pollution Control & Ecology Commission lifted its stay on the permit, clearing the way once again for construction to start. A hearing over the permit was held last week before the Arkansas Pollution Control & Ecology Commission. It was expected to continue through Friday. On Tuesday, the hearing’s first day, lawyers for both Nucor and Big River said an appeal of the decision was likely no matter what it was.
The commission is scheduled to meet on March 24 to issue its final decision.
“We still remain extremely confident that the permit will be upheld,” Tennille told Arkansas Business. “The DEQ [Department of Environmental Quality] did a fantastic job. And it certainly took more time to issue the permit in the first place than I think the Big River folks would have liked.”
However, he said, state officials had sought “an unassailable permit,” one that if challenged would be upheld.
In addition to Chitwood’s group, Tennille said, Gene Eagle, the new president of the Arkansas Development Finance Authority, and George Hopkins, executive director of the Arkansas Teacher Retirement System, were in Germany last week meeting with bankers and investors on a number of issues. The ATRS is planning to be a 20 percent investor in Big River Steel.
Those issues include starting paperwork on the $125 million bond issue approved by the state Legislature last year to help pay for construction of the mill.
“I think everyone feels confident, and the investors and the principals have assured us that if the state upholds the permit, then they will proceed even if there are ongoing lawsuits in state or federal court,” Tennille said.
Chitwood said no actual site preparation has yet taken place, though Tennille said that contracts for earth-moving and foundation preparation work had been let.
“They’re beginning to spend money and put things in place,” he said. “Mr. Correnti has a history and he said it will be no different in this case: The day that [financing] closes, the bulldozers will start to move.”
Asked whether the conflict between Nucor and Big River had put the AEDC in a difficult position with Nucor, Tennille said, “I would hope not.”
“I think Nucor tends to see this as a zero-sum game,” he said. “We certainly do not. We value Nucor’s presence in Arkansas. They’re a great corporate partner. They employ a lot of people. They continue to invest.”
However, Tennille added, “There are times when from our perspective the effort to expand the state’s economy has got to trump anybody’s individual position.”