U.S. Steel to locate $3 billion steel mill in northeast Arkansas
When Big River Steel first started operations in 2014 near Osceola in Mississippi County, it was one of the largest industrial projects ever in the state of Arkansas. BRS, now owned by U.S. Steel, is about to get a companion steel mill and it will rival the first plant in terms of money spent and jobs created.
U.S. Steel Corp. announced Tuesday it would locate a new $3 billion steel factory in Osceola, a move expected to create 900 jobs with an average pay over $100,000 annually. It is the largest capital investment project in Arkansas history.
The new optimized steel production facility is expected to feature two electric arc furnaces (EAFs) with 3 million tons per year of advanced steelmaking capability, a state-of-the-art endless casting and rolling line, and advanced finishing capabilities. Upon completion, the project will apply to become LEED certified, the company said.
“With this location selected and shovels ready, we are reshaping the future of steelmaking,” said U. S. Steel President and CEO David B. Burritt. “We had numerous competitive site options, but Osceola offers our customers incomparable advantages.”
“Arkansas has created an ideal business environment for the growth of the steel industry in our state,” Gov. Asa Hutchinson said. “The investment and high paying jobs that will result from this announcement will make a real difference in the lives of many families in Northeast Arkansas. I am grateful for the support of the legislature which was critical in winning this expansion. Now, U. S. Steel is an important part of our future and we look forward to continued success in the coming years.”
Dubbed “Project Blueprint,” the steel mill will be built in early 2022.
“The state of Arkansas, Mississippi County, the city of Osceola, Entergy, BNSF, and other parties have all worked to make this the clear choice for a path to the future without roadblocks. We’re not going to make our stakeholders wait to see progress. We intend to break ground this quarter and get to work as soon as permits are in hand. With its extraordinarily low-cost structure, energy efficient production equipment, and advanced capabilities, this $3 billion project will yield significant benefits to our customers, stockholders, communities, employees, and contribute to a more sustainable world,” Burritt added.
Shares of Pittsburgh-based U.S. Steel Corp. closed trading on Tuesday at $24.39. The company’s stock has traded between a low of $16.13 and a high of $30.57 over the past 52 weeks.
“The news this afternoon from U.S. Steel is exciting and is a testament to the workforce and environment we have in Northeast Arkansas to support this incredible growth by our steel industry,” said U.S. Rep. Rick Crawford, R-Jonesboro. “This expansion will create hundreds of direct and indirect jobs for our area, which will have far reaching impacts across the entire region. I am proud to have supported our local leaders, steel company representatives, and the steel industry as a whole while serving in Congress and will continue to advocate for American steel and steelworkers.”
Arkansas wasn’t the only state in the running for the mill. Alabama and Mississippi were also in the running for the mill. To land the project, Arkansas lawmakers put together an incentive package during a special session in December.
State economic developers convinced the legislature to put up $50 million in Quick Action Closing Fund money for site infrastructure. That money was moved from a reserve account during the special session.
Lawmakers also had to adapt recycling tax credits for the steel industry during the session. Those recycling tax credits will cost the state an average of $11 million a year for 14 years and $8.8 million a year if the state buys back the tax credits at a 20% discount. The legislation passed creates a new project type for steel manufacturers to qualify for an income tax credit for waste reduction, reuse or recycling equipment.
There are a number of qualifiers for the tax credits to be utilized. The steel mill project has to be located on the site of or adjacent to an existing qualified manufacturer of steel; have a total investment of at least $2 billion; create 700 new direct positions with an average annual wage of $120,000; and create 200 new independent direct positions with an average annual wage of $60,000, according to the Arkansas Department of Finance and Administration.
Mississippi County, home to Nucor and BRS, has become the largest county in the U.S. for steel production. Billions of dollars of infrastructure investment and thousands of jobs in the region rely on the steel industry. According to U.S. Census data, Mississippi County has seen a population decline every decade since the 1950s. Once home to over 82,000 residents and heavily dependent on an agricultural economy, Mississippi County now has about 40,000 residents.
There are more than 20 steel-related businesses in the county employing more than 3,600 workers. That’s about 1 in every 5 jobs in the county. There are low land and utility costs for businesses locating in Mississippi County. Access to the Mississippi River is complemented by interstate and rail access that criss-crosses north and south, east and west.
Talk Business & Politics' Roby Brock contributed to this report.