A steel producer has announced plans to build and operate an aluminum plant in the southeastern United States, after reaching an agreement with the company that so far has not kept his promise to locate the factory in Kentucky, even with state financial support.
This week’s announcement was the latest chapter in what has been a long and tortuous effort to build a new aluminum plant in a region of Appalachia that is struggling to create jobs.
Steel Dynamics Inc. said this week that its board had approved plans to move forward with construction of the $1.9 billion plant, though it did not say where else. than to say it will be somewhere in the Southeast. Steel Dynamics said it will own more than 94% of the facility under a joint venture agreement with Unity Aluminum. The Steel Dynamics blueprint is much larger in size and scope than Unity had envisioned. And a Unity spokesperson said the state of Kentucky would recoup its investment.
Unity, formerly known as Braidy Industries, intended to build an aluminum plant near Ashland in northeast Kentucky, but struggled for years to secure sufficient financing for the project.
The Ashland area site – approximately 240 acres (97 hectares) – is “insufficient to meet the size and scope requirements” of the new project, a Unity spokesperson told The Associated Press on Wednesday. Steel Dynamics did not respond to emails and calls seeking comment on the location of its new plant.
Kentucky Governor Andy Beshear’s administration has indicated it will try to keep the project. The state’s economic development cabinet has not been approached by Steel Dynamics, but a firm spokesperson said Wednesday that “we are actively reaching out to discuss possibilities.” Unity’s plan to build in Kentucky was a pet project of the Democratic governor’s predecessor.
Indiana-based Steel Dynamics said Tuesday the investment for its project is expected to reach $2.2 billion, which includes two supporting aluminum slab centers to be built elsewhere. Commercial production is expected to begin in early 2025, the company said.
“We are extremely excited to announce this significant growth opportunity, which aligns with our existing business and operational expertise,” said Mark. D. Millett, president and CEO of Steel Dynamics, said in a press release.
Unity Aluminum promised in 2017 to build the aluminum plant near Ashland and hire 550 people. The Appalachian region has lost thousands of jobs amid a deep decline in the coal industry and manufacturing. The company planned to open the plant in 2020. But the company underwent a management shakeup and a name change in its long and ultimately unsuccessful quest to raise enough capital to continue.
The Unity spokesperson said the company will hold a small stake in the new project.
Kentucky has its own stake in the project – a $15 million investment from the then government. Matt Bevin, a Republican, persuaded state lawmakers to approve. Frustration mounted over the years without construction beginning. This year, lawmakers considered a proposal to recoup the state investment, but the measure died.
The Unity spokesperson said Wednesday that the state will recoup its investment when the deal with Steel Dynamics closes.
The Steel Dynamics plant is expected to produce 650,000 metric tons of low-carbon flat-rolled aluminum annually, nearly double the original proposal for the Kentucky site, the Unity spokesperson said. Steel Dynamics also hopes customers will locate operations at the factory site to save money, also contributing to the need for more space, the Unity spokesperson said.
Regarding Unity’s role, Steel Dynamics said Unity employees will bring their expertise to the project.
Steel Dynamics said the plant will supply the beverage, automotive and common alloy industries. He pointed to a “substantial and growing supply shortfall” in the North American flat-rolled aluminum industry, based on growing demand from the automotive and beverage industries. And a significant number of its steel customers also have aluminum demand, he said.
The project will be funded by available cash and cash flow from operations, the company said.
Steel Dynamics said it will fully own the two recycled aluminum slab centers, one to be built in the southwestern United States and the other in Mexico.
Bruce Schreiner, The Associated Press
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