NEW YORK — A new $1.1-billion steel project spearheaded by industry veteran John D. Correnti is planned in Arkansas to serve the automotive, oil and gas, and electrical energy industries.
The project in Osceola led by Correnti’s new venture, Big River Steel LLC, was announced Jan. 29 by Arkansas Gov. Mike Beebe in Little Rock. Correnti, the former vice chairman, president and chief executive officer of Charlotte, N.C.-based steelmaker Nucor Corp., filed for incorporation Jan. 25, records show.
While it was not immediately clear what products the mill will make, a spokeswoman for the Mississippi County Economic Development agency said the facility will make electrical steels—both grain-oriented and non-grain-oriented—for transformers, as well as coiled steel for pipe.
"Having lived in Arkansas for over 20 years and having been involved in building and operating two other world-class steel mills in the state, I know first-hand that the quality of the work force in Arkansas is outstanding and well-suited for the high-paying jobs we intend to create," Correnti said in a statement. "Arkansas’ geographic location in the heart of the markets we intend to serve, the state’s well-developed transportation infrastructure, as well as the availability of reliable electrical power and the ‘can-do attitude’ of government officials in Little Rock, Mississippi County and Osceola, make Arkansas a great place for Big River Steel to make its investment."
Beebe said the project could create up to 2,000 construction jobs and 525 permanent jobs, as well as act as a catalyst for job creation, investment and new economic development beyond the facility. Construction of the mill will take some 20 months from its groundbreaking, which is expected later this year.
The plan is contingent upon the state legislature authorizing the issuance of $125 million in general obligation bonds under Amendment 82, which allows the legislature to approve up to 5 percent of Arkansas’ general revenue budget for bonding of "superprojects." According to local news reports, it is the first time Amendment 82 has been triggered since its adoption in 2004.
The money generated by the sale of the bonds would provide a $50-million loan to the company, $50 million for site preparation, $20 million associated with piling and subsurface stabilization, and $5 million for bond issuance costs.
Charles Bradford, president of New York-based Bradford Research Inc., said the electrical steel business has been difficult in recent years due to oversupply and increasing global capacity.
"It hasn’t been a good market (domestically) for electrical steel. Worse than that, there have been huge expansions outside of the U.S.," he said. "Domestic companies were already exporting a substantial portion of their product, but the Chinese have expanded production dramatically. The Koreans have done it; I think the Russians have also done it. There’s more than enough capacity here, and we’re losing on the export market."
As outlined by Amendment 82, once the governor refers the project to the speaker of the state House and the president pro tempore of the state Senate, the legislature will have 20 working days to conduct its own independent economic study. The legislation will then head to committee, after which both houses of the state legislature will vote on the project.
Correnti could not be reached for comment.
Lisa Gordon, Pittsburgh, contributed to this story.