SeverCorr Begins Construction on $800M Steel Mill in Mississippi

JACKSON, Miss. -- Crews started moving dirt Monday to prepare the construction site for an $880 million mill in north Mississippi that plans to produce high-grade steel for the automotive industry.

The mill, scheduled to open in 2007, is being built by SeverCorr, a startup company led by a longtime steel industry executive. The mill site near Columbus is within a day's drive of a dozen auto manufacturing sites in the South, including a Nissan plant in Mississippi and Hyundai and Mercedes-Benz plants in Alabama.

"We'll be able to make steel up to 74 inches wide," SeverCorr chief executive officer John Correnti said Monday. "If you take a tape measurer across an SUV or big truck ... you need steel that wide."

Correnti - who started working in the steel industry in 1969 and is a former CEO of the nation's largest steel maker, Nucor Corp. - said about a quarter of the vehicles manufactured in the United States are made in plants from South Carolina to Texas.

Correnti said most of the steel used in the southern automotive plants comes from the northern U.S. or from other countries. He said steel plants in or near the South are making narrower sheets.

Construction of the 1.2-million-square-foot SeverCorr mill is expected to take about 21 months, Correnti said.

The mill eventually will make 1.5 million tons of steel sheet a year. It will employ about 450 workers who can earn up to $70,000 in salary and production bonuses, Correnti said.

Heavy construction equipment was moved onto the 1,380-acre mill site as company officials wrapped up the project's financing during meetings Friday in New York. Correnti said crews were moving dirt Monday.

About $200 million for the project is coming from Russian steel maker OAO Severstal Group. Among the other lenders is KfW, a government-owned bank in Germany, which is putting up $227 million, and General Electric Corp's Ge Capital.

In March, Gov. Haley Barbour signed legislation with Mississippi's original incentive package of $110 million in grants or loans. Officials in the startup steel company took several months to line up other financing.

Barbour called lawmakers into special session last week to handle Hurricane Katrina recovery issues, and he put a revised steel mill incentive package on the agenda. Lawmakers quickly approved the new package reducing the state's loan from $75 million to $60 million, and Barbour signed it into law Thursday.

(c) 2005 Associated Press