A multi-million dollar incentive package passed by the state Wednesday paves the way for a $2.5 billion dollar project in Lowndes County involving multiple companies.
In a special session, legislators approved $246 million in financial assistance for Indiana-based Steel Dynamics to construct a state-of-the-art low-carbon, aluminum flat-rolled mill near its Columbus steel mill on Airport Road and a biocarbon production facility on Artesia Road, near the International Paper pulp mill. Gov. Tate Reeves signed the bills into law shortly after.
The company’s planned $2.5 billion project represents the largest capital investment in Mississippi’s history, Reeves said in a press conference after signing the bill. The two facilities will also create 1,000 jobs with an average annual salary of $93,000.
The biocarbon facility — expected to create 40 jobs — will begin construction in late 2022 and is slated for completion by the end of 2023, while the aluminum mill — expected to create 700 jobs — will begin construction sometime in 2023 and is expected to be complete in 2025, according to a press release the Golden Triangle Development LINK issued following the session. Other expected phases of the project make up the balance of the promised jobs.
During Wednesday’s special session, Sen. Josh Harkins said the construction of the project will involve more than 30,000 workers.
“I’ve had a lot of my senator friends teasing me about it, they’ve kind of been heckling me a little bit because we were able to land it in our area,” said State Sen. Chuck Younger (R-Columbus) said. “But it’s not just our area, it’s huge for the whole state. So many other jobs will be a spin-off from this.”
Both the House and Senate overwhelmingly passed three bills that set up the incentive package through the Mississippi Major Economic Impact Authority — establishing project phases and creating the funds and disbursement protocols for executing the incentive package.
The Senate passed all three bills semi-unanimously with one “present” vote. The House passed all three bills with only five dissenting votes to each.
All senators and representatives from Lowndes, Oktibbeha, Clay and Noxubee counties voted to approve the incentive package overall, District 41 State Rep. Kabir Karriem (D-Columbus) said.
“We were in solidarity, and we had no problems,” Karriem said.
According to the first bill, $155 million will be disbursed via grants, $55 million will be given immediately to the company to begin the project and the rest will be disbursed as it reaches specific benchmarks during the construction and hiring phases of its project; $25 million will go toward road improvements; $18 million will be loaned to Lowndes County to pay for land acquisition and infrastructure work including sewer and water.
The county will repay the $18 million to the state over 10 years using proceeds from its fee-in-lieu agreement with Steel Dynamics for the project, said board of supervisors president Trip Hairston.
The county can enter a fee-in-lieu with industries that make a capital investment of at least $60 million. It allows the company to pay one-third of annual ad valorem taxes for up to 10 years.
The county tax assessor’s office estimates the county will receive $5.5 million and the Lowndes County School District $6.4 million annually from the fee-in-lieu.
“This is the largest economic development project in Mississippi’s history, and it belongs to Lowndes County,” Hairston told The Dispatch on Wednesday night. “It’s been a lot of work putting this all together, but it’s been a lot of fun.”
The state is also giving a 15-year payroll tax rebate based on the gross payroll of the company, with $45 million being placed into a reserve account in order to fulfill this obligation with cash payments in the event the state phases out the state income tax, something Reeves has proposed.
SDI will spend $1.9 billion to build the aluminum flat rolled mill and $150 million to build the biocarbon manufacturing facility.
Once the facilities are up and running, the aluminum mill, Aluminum Dynamics, will produce 650 tons of finished metal alloy products serving industries such as beverage packaging, automotive, and other common alloy industrial sectors.
“There’s an excitement here,” said District 39 Rep. Dana McLean (R-Columbus). “I think everybody all over the state, or most, are really excited about it. Most of the representatives are very excited about it. Even though it’s not in their district, they realize it’s good for the state and it’s good for our economy.”
Clawback
While the incentive package doesn’t not allow for clawback provisions for the granted monies, the tax rebates and credits are subject to penalties and suspensions in the event the company doesn’t hit their promised benchmarks. In contrast to some previous state incentive packages, this one allows the state to seek recourse from the parent company — SDI — in the event of a failure to perform.
SDI ranks 196 on the Fortune 500 list and is the third largest steel producer in the United States. The company’s 2021 net income was $3.2 billion, a record for the company.
Biocarbon process
The biocarbon facility, SDI Biocarbon Solutions, will produce 160,000 metric tons of biocarbon products to fuel SDI’s existing steel mill’s electric arc furnaces. The fuel itself is made from organic waste material such as wood to create an alternative to coke or coal, LINK Chief Executive Officer Joe Max Higgins said.
Higgins also noted the biocarbon facility will differ from a previous company in Lowndes County, KiOR, a bio-organic fuels plant that attempted to manufacture crude-oil using similar biowaste materials in mass quantities in 2012. The plant stopped operations in late 2013 after failing to produce the oil at the necessary volume to stay viable.
Higgins said the difference in large part consists of the technology used to produce the fuel. As KiOR was trying to make liquid fuel, the new biocarbon facility will produce pellets of condensed and charred wood, making it a much safer investment.
“They (KiOR) were taking wood chips and extracting from it to make diesel and gasoline fuel,” Higgins said. “All this (SDI Biocarbon) does is charcoal the wood. I’m not a historian, but we’ve been making charcoal probably not long after man invented fire.”
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Quality, in-depth journalism is essential to a healthy community. The Dispatch brings you the most complete reporting and insightful commentary in the Golden Triangle, but we need your help to continue our efforts. In the past week, our reporters have posted 32 articles to cdispatch.com. Please consider subscribing to our website for only $2.30 per week to help support local journalism and our community.
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