Big River Steel Mill rises in Northeast Arkansas

Billion-dollar project expected to have major impact on region

By Jan Cottingham Arkansas Business

The construction of the Big River Steel mill is a project defined by superlatives: at $1.3 billion, the biggest economic development project in Arkansas history; at $700 million, the biggest construction project in the state; one of the most technologically advanced, etc., etc. But on a day in late October, the superlatives were “muddiest” and “dreariest.” Most of the 1,300-acre construction site 2 miles south of Osceola was mud, Mississippi River muck, the kind that sucks boots off retreating feet. Despite the day’s drizzle, workers swarmed the site, though not as many as had been working in the string of clear, dry days preceding this visit. Those construction workers — about 1,200 when it’s not raining — have made impressive progress on the project first announced on Jan. 29, 2013, by then-Gov. Mike Beebe and Big River Steel CEO John Correnti. Beebe is no longer governor, and John Correnti, 68, died Aug. 18 while on a business trip in Chicago, but the project, which broke ground Sept. 22, 2014, is moving full speed ahead, powering through to a planned opening in late summer or early fall of next year. Still, Correnti’s shadow hangs over this day’s tour. John Correnti was one of those rare “force of nature” executives, enthusiastic, likable, a man who shared his cellphone number with the press. Gov. Asa Hutchinson, Beebe’s successor, noted on Correnti’s passing that he “has been called a ‘steel man’s steel man,’ and indeed his name was synonymous with the steel industry.” So if there was a ghost along on this tour, it was a friendly one. David Stickler, a member of Big River’s board and the company’s chief administrative officer, was named CEO two days after Correnti’s death. He has set up at Big River’s temporary offices at 1425 Ohlendorf Road, 3 miles from the plant site. Stickler has as much reason to push the project forward as anyone: He’s senior managing director of Global Principal Partners of Miami, the investment group that arranged Big River Steel’s financing. Instead of Correnti leading the tour, Mark Bula, the company’s chief commercial officer, did the honors, along with George Hopkins, executive director of the Arkansas Teacher Retirement System, a major Big River investor. ‘Steel Mill Heaven’ In announcing Big River Steel’s plans for a steel mill in Mississippi County, Correnti called the site “steel mill heaven,” citing its proximity to the Mississippi River on its east side and a Burlington Northern Santa Fe railroad line and Interstate 55 on the west. Correnti, who once led Nucor Corp., which operates two steel mills in Mississippi County, maintained a home in Blytheville and is buried there. Big River is expected to employ 450 people at average annual compensation of $75,000. Correnti said more than two years ago that average salaries could approach $100,000 after the plant opens. In 2013, the Arkansas Legislature approved a multimillion-dollar package of incentives, including a $125 million bond issue under Amendment 82 of the Arkansas Constitution, the first time the “superproject” legislation was implemented. Legislators approved the bond package despite objections from Nucor. Nucor said the Big River mill threatened Arkansas’ existing steel mill industry, but lawmakers and state officials were unsympathetic. Nucor went on to file a suit challenging the air permit awarded Big River Steel by the Arkansas Pollution Control & Ecology Commission. The case remains before the Arkansas Court of Appeals, but Nucor’s complaints have so far failed in a number of legal and administrative venues. In 2014, ATRS trustees authorized investing up to $125 million in Big River Steel. Koch Minerals, a subsidiary of Koch Industries of Wichita, Kansas, was an early — and major — investor in Big River. The mill’s location is ideal in another way: It’s near an existing 500-kilovolt Entergy Arkansas transmission line. Big River requires 450 megawatts of power. The electricity used by 100 homes for a year equals one minute of Big River Steel’s usage, Bula said. Entergy is also building a new 500-kilovolt substation, called Driver, near the steel mill. That new substation is about 80 percent complete, and a new transmission line will connect this substation to Big River’s own $30 million substation, also now under construction. “Entergy’s $70 million investment in the electrical infrastructure in Mississippi County supports economic growth and will enhance reliability in northeast Arkansas,” an Entergy spokesman said. World’s First Flex Mill At Big River Steel, one electric arc furnace, or EAF, will feed one caster, at least initially. Scrap steel will be delivered to the melt shop to be melted by the EAF, which uses an electric arc to heat material. The molten product will then go to a ladle metallurgy furnace, which will refine it. From there it will go to an RH degasser, which cleans and processes it further. Once it’s ready to be cast, the molten steel heads to a turret that feeds the steel caster. The caster converts the molten product to a solid slab. That slab is processed into what’s called “hot rolled coil,” which can then be transformed into various products by undergoing finishing processes, such as pickling and galvanizing. Big River’s process, using an electric arc furnace, differs from that of older steelmaking technologies using blast furnaces, the kinds that were used in the integrated mills of the steelmaking centers of the Great Lakes region and Pittsburgh. Big River Steel will be what it calls the world’s first steel “flex mill,” a combination of an integrated mill and a steel mini-mill. It merges “the wide product mix and superior grade capabilities of an integrated mill with the nimbleness and technological advancements of a mini mill,” the company says. Big River is seeking to produce what Bula called “high-end niche products” for the automotive, energy and electrical sectors. The mill will be able to produce 1.6 million short tons of steel annually. SMS, based in Dusseldorf, Germany, is supplying the steelmaking equipment. “Twenty years ago, 25 years ago, probably 30 percent of the steel in the United States was made by EAF, scrap-based mills,” Bula said. “Today, it’s probably 65-70 percent, if not more, so it’s actually flipped. It’s just a much more cost-effective way of doing it.” He added: “As we get more into this industry and as this equipment is used more for steel-making, we learn. The equipment gets better, so every generation of steel mill that’s made gets into higher-end steels, and that’s what this is all about. This is a mill that’s the most recent, one of the most technologically advanced mills built in the world right now.” A number of Arkansas companies are involved in construction of the mill, including Schueck Steel of Little Rock, Systems Contracting Corp. of El Dorado, Razorback Concrete Co. of West Memphis, Stracener Brothers Construction of Blytheville and Dennis Allen Construction Co. of Mountain Home. Bula quoted Correnti a number of times during the nearly four-hour tour. “When John and I used to do a lot of economic tours looking for sites, he would always walk in and say, ‘I need three things: power, power, power.’ Because electricity is the major input. Electricity is so important. “But the next thing he would say is geography is really important,” Bula said. “You’ve got to have that geography both for inbound, outbound.” And, Bula said, Correnti stressed the need for a market for steel near the steel-producing site. Finally, Bula said, the support of the state was essential. “We like to have a place where people want you to be.” Big Project, Big Numbers Big River Steel has been called the largest economic development project in Arkansas history, and a big project means big numbers: $3 billion, the impact the mill will have on the area’s economy, according to CEO David Stickler. 1.2 million, the cubic yards moved as part of the site excavation. 22,000, the tons of rebar expected to be used by Thanksgiving. 747,060 SF, the space under roof in Big River’s finishing mill complex, the equivalent of 16 football fields. 30,000 gallons a minute, the water pumped out of the water table of the Big River site. [Note: This story originally appeared on http://www.arkansasbusiness.com. All rights reserved]

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