Gov seeks to salvage aluminum mill deal promised to Kentucky

Gov. Andy Beshear has made a pitch to a company that took over plans to build an aluminum plant once promised to Kentucky

ByBRUCE SCHREINER Associated Press
July 21, 2022, 5:17 PM
FILE - Braidy Industries Inc. CEO Craig Bouchard, right, and then-Republican Kentucky Gov. Matt Bevin speak with reporters in Wurtland, Ky., on April 26, 2017. Braidy Industries still needs to raise $500 million to build a long-promised $1.7 billion
FILE - Braidy Industries Inc. CEO Craig Bouchard, right, and then-Republican Kentucky Gov. Matt Bevin speak with reporters in Wurtland, Ky., on April 26, 2017. Braidy Industries still needs to raise $500 million to build a long-promised $1.7 billion aluminum plant in Appalachia, a top company executive told Kentucky lawmakers on Tuesday, July 19, 2022. (AP Photo/Adam Beam, File)
The Associated Press

FRANKFORT, Ky. -- Gov. Andy Beshear made a pitch Thursday to a steel company that took over plans to build an aluminum plant once promised to Kentucky, hoping to salvage a deal struck by his predecessor.

Beshear said his economic development team has reached out to Steel Dynamics Inc., offering to show potential sites for the $1.9 billion plant. The company said this week it will build and operate the mill but did not specify a location, other than to say it will be in the southeastern U.S.

“We are very interested in working with them," the governor said at his weekly news conference. "We want to talk to them. We want their jobs to be in Kentucky.”

Steel Dynamics did not immediately respond to an email Thursday seeking comment. It took over the project after reaching a deal with another company that so far has failed to deliver on its promise to put the plant in Kentucky — even with financial backing from the state.

Indiana-based Steel Dynamics said it will own more than 94% of the facility through a joint venture arrangement with Unity Aluminum. Unity — formerly known as Braidy Industries — intended to build the mill near Ashland in northeastern Kentucky but struggled to line up sufficient financing.

Kentucky has its own stake in the project — a $15 million investment that then-Gov. Matt Bevin, a Republican, persuaded state lawmakers to approve to back Braidy. A Unity spokesperson offered assurances Wednesday that the state of Kentucky will recoup its investment.

Beshear's frustration with the years of promises from Braidy and then Unity boiled over Thursday. He said bluntly it will go down as the “shadiest economic development deal in Kentucky’s history.”

“We saw nothing for Kentucky," said Beshear, a Democrat who ousted Bevin in the 2019 election. “We were used. We were conned. They sold us false hope and that is very, very wrong.”

The Unity spokesperson did not immediately respond to the governor's remarks.

In 2017, amid great fanfare, Braidy promised to build the plant near Ashland and hire 550 people. The project was hailed at the time by state and local officials. The Appalachian region has lost thousands of jobs amid deep declines in the coal industry and manufacturing. The company planned to have the mill open in 2020. But the company underwent a management shakeup and name change in its long and ultimately unsuccessful quest to raise sufficient capital to proceed.

Now, Steel Dynamics' plans for the mill are much larger in size and scope than what Unity had contemplated. And that could potentially deliver the final setback for the Ashland area's hopes.

The Steel Dynamics mill is expected to produce nearly double the volume of aluminum than the original proposal for the Kentucky site, the Unity spokesperson has said. Steel Dynamics also hopes customers will locate operations at the mill site to save money.

The Ashland-area site — about 240 acres (97 hectares) — is “insufficient to meet the size and scope requirements” of the new project, the Unity spokesperson told The Associated Press on Wednesday. Steel Dynamics has not responded to emails asking about that Kentucky site.

Steel Dynamics has said its estimated $2.2 billion project includes two supporting aluminum slab centers to be built elsewhere. Commercial production is planned to begin in early 2025. Unity will have a small ownership stake in the new project, its spokesperson has said.

Beshear said Thursday that the Ashland-area site will be developed, one way or another.

“Either we are going to get Steel Dynamics to come here, or we’re going to get that property back," he said. "We could have located multiple opportunities on that property by now.”

Kentucky Senate President Robert Stivers said he hopes the new mill venture will be a success.

“More importantly, we want to see Kentucky be a beneficiary,” the Republican Senate leader said in a statement Thursday. "For that reason, we remain optimistic and encourage the administration to do its best and fully engage in retaining the project.”

Beshear already has landed the state’s two largest-ever economic development projects — both related to battery production for electric vehicles. Kentucky last year posted records for job creation and investments and on Thursday posted its lowest-ever unemployment rate — 3.7% in June.

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