Investor Group To Build Mississippi Steel Mill

A group of investors will soon announce the construction of an $880 million steel mill in Mississippi that will churn out 1.5 million tons of steel sheet a year, the Wall Street Journal reported.

The SeverCorr plant, which could boost competition among U.S. steelmakers and drive down prices, will make higher quality steels for use by foreign auto makers that have built assembly plants in the southeast United States.

The site for the plant is in Columbus, Mississippi, within reach of 14 car plants producing about 4 million vehicles a year, a quarter of the vehicles assembled in the United States annually, the paper said.

John Correnti, former chief executive of Charlotte, North Carolina-based Nucor Corp. will be the president and CEO of the new company, SteelCorr Inc.

Russian steelmaker OAO Severstal Group is investing about $200 million in the project, along with other investors such as GE Capital, Correnti told the Journal in an interview. SteelCorr expected to close financing for the deal on Friday.

Severstal purchased a steel plant in Dearborn, Michigan from Rouge Industries Inc. in 2003, and has continued to expand its presence in the U.S. with joint ventures for steelmaking and raw materials assets.

The company says it has 80 percent of construction contracts in place and plans to begin building the 1.2 million-square-foot plant immediately. Steel production is expected to start by the end of 2007 with about 450 workers.

Correnti told the Journal his company would be a low-cost producer with a long-term energy arrangement with the Tennessee Valley Authority, a U.S. government-controlled power producer.

On Thursday, Sept. 29th, Mississippi Gov. Haley Barbour signed legislation that gives SteelCorr a $25 million grant to help build infrastructure and $60 million in loans. The company will also get tax benefits for manufacturers locating in the region. Reuters