Missouri GOP quick to change law for possible smelter, steel plants, but neither materializing yet

Jul 14, 2017
Originally published on July 14, 2017 2:08 pm

There was a sense of urgency when Missouri Gov. Eric Greitens called the first special session on May 18, aimed primarily at reopening an aluminum-smelting operation that had been southeast Missouri’s largest employer.

But in the weeks since Republicans gave the new governor what he wanted, there’s been no communication between smelting-plant officials and the state agency tasked with approving lower utility rates for such projects. However, leaders in the area are pinning their job-creation hopes on the other issue in that special session — a new steel mill that could employ up to 200 people.

Lawmakers in the area have differing accounts for why there’s a delay in getting the much-hyped smelting plant back online.

Rep. Don Rone, a Republican from Portageville, said back in May that the smelter plant and steel plant "got their financing. They're ready to go." He told St. Louis Public Radio this week that executives with the steel mill and the smelter have told him they’re working on proposals to get lower electric rates.

Rone, who delivered an emotional speech on the House floor in May asking for help to turn around the area’s economic decline, said he’s optimistic both projects will open soon.

“I’m even more so than when I made my speech,’’ he said.

But Sen. Doug Libla, a Republican from Poplar Bluff, hasn’t heard much about the progress of the two projects.

“I have not been contacted by anybody, including local officials in New Madrid,” said Libla, who supports the projects but was at odds with Rone and Greitens during the special session. “I would be available at any time to help promote a company coming into our district to add jobs.”

Greitens’ office did not return a request for comment.

Steel over smelting?

New Madrid is one of three finalists for a steel plant run by India-based Sumangala Steel, according to City Administrator Richard McGill. (The other contenders are in West Virginia and New York.) He said the top executive, whose name city officials and lawmakers wouldn’t divulge, will be making a repeat visit to the city of about 3,100 people next weekend.

The executive also wants to talk to Greitens, McGill said. The Missouri Department of Economic Development could not comment on “active negotiations,” communications and marketing director Amy Susan said.

McGill is concerned about the ripple effect of his town losing hundreds of jobs more than a year ago, when the Noranda aluminum-smelting plant shut down.

“We know that, without these jobs, that economic impact is going to continue to worsen,” he said of the possible steel plant.

Southeast Missouri has some of the nation's poorest counties.

Steel plants may get a boost from President Donald Trump, who is considering restrictions on imported steel, though the very same thing could raise manufacturers’ costs.

Meanwhile, aluminum smelting is an endangered industry in the United States, with only five in operation, according to the U.S. Geological Survey. In 1993, there were 23. The high cost of production, which relies on a lot of electricity, has been touted as one of the factors fueling the closings around the country.

Before declaring bankruptcy in 2016, Noranda officials complained for years of the threat caused by the sharp decline of aluminum prices, fueled in part by a flood of lower-cost aluminum from China.

The Missouri smelter’s new owners are Magnitude 7 Metals, a subsidiary of Swiss firm ARG International AG. Magnitude spokesman Donnie Brittain declined comment when asked about the firm’s plans.

The legislation that Greitens signed allowed the state’s Public Service Commission to negotiate with Ameren Missouri so that the possible smelting and steel plants could get lower utility rates — a main sticking point for Democrats and some Republicans during the special session. In fact, Libla succeeded in stripping out provisions that he said would have made it easier for utilities to raise consumers’ electricity rates and skirt PSC oversight.

Ameren Missouri spokesman Matt Forck indicated there’s still hope the smelter could be revived, saying in a statement that the company is having “ongoing discussions with Magnitude 7 Metals and other stakeholders.” He added that any “special energy rate for Magnitude 7 Metals or a new steel mill” would have to be approved by the PSC.

Procedures generally call for a company or a utility to inform the PSC at least 60 days ahead of time that it plans to formally file a proposal with the commission. The commission has had no communications with anyone connected with the steel plant or the new owner of the smelting plant, PSC staff director Natelle Dietrich told St. Louis Public Radio.

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