By FRANK LEWIS and WAYNE ALLEN
PDT Staff Writers
Scioto County is asking for helping raising $175,000 for a study of the proposed New Steel project planned for Franklin Furnace. County commissioners are seeking two grants, one from the Appalachian Regional Commission (ARC) and another from Fluor B&W Commitment Funds to pay the professional fees for a Hatch Ltd. study.
“The project needs a Hatch Study. When MMK was going to be in the pile, they had commissioned a Hatch Study, and then everything blew up all at once, so that Hatch Study needs to be update for the Wall Street boys,” Scioto County Economic Development Office Supervisor Steve Wells said. “Part of this they have already done when they were looking at MMK, but they look at the process itself.”
Wells said the study will look at the product, the market for that product, the viability to make that product efficiently and market it competitively.
“They look at the rate of return for the investors. It’s a little more leaning toward engineering than a business plan, because they get a lot of technical stuff in there, too,” Wells said.
Russia’s largest steel manufacturer, MMK (Magnitogorsk Iron and Steel Works) was originally in line to build the steel plant at Franklin Furnace. That deal fell through for several reasons, including economic recession and the Russian government’s reluctance to build a plant in the U.S.
The study is a requirement for financing consideration by investment bankers, and Hatch Ltd., a multi-national corporation headquartered in Canada, is a corporation whose opinions are followed closely by investment bankers in the U.S.
“We’re going to be applying to the ARC Development Fund for $100,000,” Scioto County Commissioners Chairman Skip Riffe said. “We’re going to be applying to the Fluor B&W Community Commitment Fund for $50,000. We would provide a local “in kind” match $25,000 to bring it to $175,000.”
“We need to keep things current, so we are trying to help with that,” Wells said of the need for the study. “There are, of course, all sorts of fees and things that go with pushing these things through and trying to get another power purchase.”
Government officials and New Steel officials have a meeting scheduled with an undisclosed energy company and the Public Utilities Commission of Ohio (PUCO) in the next two weeks to try to find a buyer for surplus energy that will be produced from the New Steel plant. The plant would produce about 600 megawatts, and would need an energy company to purchase much of that power to help defray the cost of building the facility. Ohio Senate President Tom Niehaus was instrumental in setting up the meetings for the power purchase component of the project.
Both local and corporate leaders are expressing guarded optimism that the plant will be built.
Frank Lewis and Wayne Allen may be reached at 740-353-3101.