Aluminum plant project threatened with $15m repayment to KY

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Overgrown signs and fencing for Unity Aluminum in front of the EastPark Industrial Center in Ashland, Ky., Thursday, August 19, 2021.

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The $15 million Kentucky invested in a company that promised to build a massive aluminum plant in eastern Kentucky has yet to produce a return for the state and lawmakers’ patience has run out. blunt.

Unity Aluminum, formerly Braidy Industries, pledged to build a $1.7 billion aluminum plant near Ashland after the legislature approved an unprecedented $15 million direct investment in the company in 2017. He promised to create 550 well-paying jobs in an area devastated by the decline of the coal industry.

Four years later, Unity Aluminum has not started construction or started production, despite an initial projection for the plant to be completed in 2020 and produce aluminum sheet for the automotive industry, as promised by the former CEO and Founder Craig T. Bouchard.

The company fell short of its goal of raising $1 billion to build and equip the plant. Unity Aluminum asked Commonwealth Seed Capital, the Cabinet for Economic Development entity that made the investment, for several extensions to achieve its goal before it had to repay the money. The last approved extension runs until the end of March.

On Friday, Unity Aluminum executives fielded questions from the Legislature’s Interim Joint Committee on Appropriations and Revenues, which voted in favor of the project several years ago.

Nate Haney, senior vice president of global affairs and commercial operations, said Unity Aluminum is “cautiously confident” after “a roller coaster ride over the past two years”.

Senator Christian McDaniel, co-chairman of the committee, was not so hopeful about the future success of the aluminum plant.

“I believe one of the worst financial votes I’ve ever taken was this one,” McDaniel, R-Taylor Mill, said. “I feel like two administrations now and several general meetings have been played for fools and written on the road.”

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“We fail to live in a world where one element is straining the resources of the Commonwealth,” Senator Chris McDaniel said of teachers’ pensions. Ryan C.Hermens [email protected]

McDaniel asked Haney why, if Unity raised $165 million, he’s not repaying the $15 million to the state to avoid questions from the committee.

Haney swerved, saying he couldn’t respond because that decision wasn’t his and the company needed to keep parts of its funding confidential.

He said Unity would like to have state support and that “investors have made it clear that they also want Kentucky’s support.”

McDaniel said the committee wanted to see a successful mill operation in Ashland, but he didn’t want the state to fund the project after his questions weren’t answered.

“I will introduce a bill this year that will require your reimbursement of these incentives and I hope I can have the support of these committee members,” McDaniel said.

Sen. Michael Nemes, R-Shepherdsville, told company executives they need to provide more information since the state is Unity’s partner because of taxpayer funds they “regret giving away” .

Co-Chair Jason Petrie, R-Elkton, said he voted to fund the plant, but it’s a “vote that’s still stuck in my head.” Petrie said his role on the committee is to ensure a return on investment and on that $15 million investment he has seen nothing.

“My bandwidth, my airstrip, my ability to hope and pray further is almost completely shut down,” Petrie said.

Haney said he expects Unity to meet its fundraising goal before the deadline and complete construction of the 240-acre property in 2025.

From Braidy Industries to Unity Aluminum

Unity Aluminum has made significant changes since the state investment. Bouchard was kicked out of Braidy Industries last year after the company accused him of spending $330,000 on travel and meal expenses, chartering unauthorized private planes and awarded bonuses, contrary to company policy.

The company appointed a new CEO, Don Foster, in June 2020, who later stepped down to serve on the board. Terry Gill has been named CEO. He was the former secretary of former Governor Matt Bevin’s economic development cabinet, which organized the investment. Gill became a contractor at Unity Aluminum in April 2020.

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Braidy Industries Inc. CEO Craig Bouchard, right, and Republican Governor Matt Bevin spoke to reporters in Wurtland in April. The company plans to build an aluminum plant in Greenup County, hiring 550 people. Adam Beam Associated press

Haney was also a member of the Bevin administration.

The company renamed itself Unity Aluminum in October, dropping Braidy Industries, which is named after one of Bouchard’s children.

The company has also caused controversy by attempting to partner with Russian aluminum company Rusal, which previously faced US sanctions and had offered to invest $200 million in the aluminum plant.

Haney said Rusal is no longer part of Unity’s funding.

“We will no longer have any further Russian ownership in Unity Aluminum as a cash flow,” Haney said.

Unity has an agreement with Rusal to supply aluminum slabs, but Rusal will not own them and there will be no further collaboration with the Russian government or Russian citizens, said materials manager Barnardo Bulnes. premieres at Unity.

Braidy Industries also received a $4 million grant from the Abandoned Mine Lands pilot program in 2017 for the development of the site. Haney said the grant helped with drainage, which was a “good project for whoever ends up there.”

This story was originally published September 27, 2021 1:58 p.m.

Liz Moomey is a Report for America Corps member covering Eastern Kentucky for the Lexington Herald-Leader. She is based in Pikeville.

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