Big River Steel is the largest industrial project in Arkansas history, and it’s already paid off its state loans years in advance.
The company announced Thursday it had paid a $50 million loan back to the state of Arkansas – 17 years before it was completely due. The loan was part of a package to entice Big River Steel to build a $1.3 billion scrap metal recycling and flat-rolled steel production facility on a 1,100-acre site adjacent to the Mississippi River in Osceola. The repayment was presented to Gov. Asa Hutchinson.
“The early repayment of this $50 million loan is a strong indication of the financial strength of Big River Steel and reaffirms my confidence in the state’s investment through Amendment 82,” Hutchinson said. “Not only has Big River paid off the loan early, but the company has strengthened our economy with hundreds of millions of dollars in investment.”
Big River Steel was the state’s first ever Amendment 82 project and is the single largest private investment in Arkansas history. Amendment 82 allows the state to issue bonds to pay for infrastructure improvements on projects that exceed $500 million in investment and create at least 500 jobs.
The company invested $10 million with Arkansas Northeastern College for training programs to prepare applicants for the mill’s 425 positions with average annual wages of $75,000. The company is projected to employ more than 500 workers when its plans are completed.
Since announcing its location three years ago, the mill has also helped attract an additional $300 million in investments and another 100 jobs from suppliers and support services of Big River Steel to the state. The company announced in August that it had closed on $1.225 billion of financing which was used to refinance a substantial majority of its outstanding indebtedness, including the early repayment to the state.
“Big River Steel is extremely proud to be able to repay the state of Arkansas $50 million economic incentive loan 17 years early. Arkansas is a great place to own and operate a business and I look forward to exploring future growth opportunities with Governor Hutchinson,” Big River Steel CEO Dave Stickler said.
Big River Steel built the world’s first Flex Mill, a steel “mini mill” focused on the production of a wide product spectrum, including advanced automotive steels and electrical steels. Big River melted its first scrap metal and produced its first steel in December 2016. Over the past 10 months, the company has provided steel products to more than 120 customers in the automotive, energy, construction and agricultural industries.
The facility is the first steel mill to be a Leadership in Energy and Environmental Design, LEED, certified based on its environmental sustainability efforts and its energy efficiency performance. The mill not only adheres to Environmental Protection Agency standards, but it will also comply with European environmental standards, which are in some cases much more stringent, Stickler said.
In January, the mill produced 63,000 tons of steel, an all-time record for a steel mill startup, Stickler said. The mill will produce about 1.65 million tons of steel each year. The company will also recycle about 2 million tons of steel per year.
Koch Industries owns a 40% stake in the company along with Global Principal Partners (20%) and the Arkansas Teacher’s Retirement System (20%).