IRPT Annual Conference - April 23-25, 2019 - Baton Rouge, LA

Decisions coming soon on steel mill, smelter in New Madrid

Decisions coming soon on steel mill, smelter in New Madrid

Decisions coming soon on steel mill, smelter in New Madrid

An India-based company could decide by year’s end whether to establish a steel mill in the Missouri Bootheel, a state lawmaker said Thursday.

State Rep. Don Rone, R-Portageville, said a New Madrid, Missouri, site along Interstate 55 is in the running for a mill that would provide about 165 jobs.

The site is in the city’s new, 200-acre industrial park, Rone said.

In addition, a Swiss company could determine by January whether it will reopen the former Noranda aluminum smelter, providing about 300 jobs, he said.

Magnitude 7 purchased the smelter in bankruptcy. It was the only potential buyer that didn’t want to scrap the plant, Rone said.

Sumangala Steel is studying at least three possible sites for its mill, including New Madrid, Rone said. The others are in Mississippi and Tennessee.

“The steel-mill gentleman said he would give us a ‘yes’ or ‘no’ answer before the end of the year,” Rone said. “It’s right around the corner.”

He added, “We are cautiously optimistic that it will be New Madrid.” Rone said the company owner would not have considered locating a steel mill in New Madrid if the Missouri Legislature had not approved a right-to-work bill and a measure that provided the ability for large power users to negotiate lower electric rates.

Mississippi and Tennessee also are right-to-work states, Rone said, emphasizing why it is important to industrial recruitment Missouri is a right-to-work state.

The Bootheel lawmaker led the successful legislative effort, which concluded with passage of the utility bill in a special session called by Gov. Eric Greitens in May.

An electric rate with AmerenUE has been negotiated, Rone said.

The steel company owner has stated that the rate “is competitive with other states, and he is happy with the rate,” Rone said.

Rone said the steel mill owner is impressed with the New Madrid site and the ability to bring in raw materials for the plant by river barge.

City administrator Richard McGill said the city would look to extend a rail spur to the industrial site, a distance of about 1,000 to 1,500 feet.

The city also would construct a port facility on the Mississippi River less than a mile from the industrial site, McGill said. The facility would be designed strictly for use by the steel mill.

That river site is closer than the location of the existing New Madrid County port, McGill said. That port is five miles south of the city.

Federal and state agencies have promised funding to construct the port facility if the mill is built in New Madrid, the city administrator said.

About 900 people lost their jobs when the Noranda plant closed in 2016. Rone said 300 of those employees lived in his district, which includes parts of Mississippi, New Madrid, Pemiscot and Scott counties.

Rone said the layoffs devastated the area economically. The average household income dropped by $6,000 in New Madrid County since the smelter closed, Rone said.

McGill said the city and other local governments have seen a drop in tax revenue too.

Rone and McGill said landing a steel mill and reopening the smelter would be a great Christmas present for the region’s residents and the economy.