Koch an investor in Arkansas steel project
02/25/2013 4:10 PM
02/25/2013 4:10 PM
Koch Industries subsidiary Koch Minerals is a key investor in a proposed $1.1 billion steel plant in Arkansas.
The project’s developer, John D. Correnti and Global Principal Partners, is seeking $125 million in grants and loans from the state of Arkansas to help finance the Big River Steel project in Osceola, Ark.
The plant would be a mini-mill which converts steel scrap into various grades of steel. The developer promises to employ 2,000 people during construction and more than 500 when the plant is operating.
The Arkansas Legislature, is expected to soon hire a consultant who will analyze Big River Steel LLC’s financial and business plans.
Mississippi had also made an offer for the plant.
“Unless there are some glaring red flags, I think it’s awfully hard to not support the project,” Speaker Davy Carter, R-Cabot, said Friday as legislators waited for bids from consultants.
State economic officials and Gov. Mike Beebe have given their approval for the project, as has the Arkansas Teacher Retirement System, whose board invested $60 million as start-up money.
Arkansas Economic Development Commission spokesman Joe Holmes said the documents the agency handed over Thursday to legislators are shielded from state’s Freedom of Information Act. The key document was a commitment letter, which was conveyed with other information that Carter and Senate President Pro Tem Michael Lamoureux requested, Holmes said.
The 20-day clock started with the arrival of the letter of commitment. The project’s backers want the state to borrow $125 million — $50 million as a loan and $75 million as a grant — to help with construction.
The Teacher Retirement System commissioned its own study which gave Big River Steel a glowing endorsement, but noted a number of risks. Even if the market for the steel doesn’t turn out as expected by the developers, the Teacher Retirement System would still get a healthy return on its investment, the study concluded.
Correnti and his team have developed 15 similar mills over the last 25 years.
Koch had no further comment on the project, said spokesman Paul Baltzer.