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Severstal Columbus began as a joint venture called SeverCorr. In 2005, a group of six seasoned steel executives partnered with Severstal to secure financing and build a “next-generation” steel plant. Within a few months, the team secured more than $880 million in start-up funding for a new steel mill. In naming SeverCorr as the 2005 Deal of the Year for the Americas, Project Finance magazine described the package as “risk-spreading on a grand scale” and as “…a blend of techniques from different project sectors and at a basic level comprises $220 million of equity, $36.5 million of government grants and $565.8 million of debt, split between senior, mezzanine, export credit-backed, vendor financing and B loan facilities – in effect a multi-sourcing deal.”
While they were securing the financing package, the team also began a search for the right place to site a massive steel mill. While literally hundreds of communities would be interested in a project of this size, only a relative handful of sites have enough acreage, transportation capabilities and electric power availability for a project of this magnitude. Called a “megasite” in development lingo, these sites must be within 400 miles or so of their markets, since transportation can be a significant component of the cost of steel.
Quoting again from Project Finance Magazine: “The siting of the plant in the southern US is optimal, given the need for high-quality steel production in the south and the growth of foreign car manufacturing in the region. SeverCorr is sitting in the middle of an area that produces one-third of the 12 million cars manufactured in the US per year.”
By the spring of 2005, it became apparent that the best-positioned megasite was one in Lowndes County, Mississippi, near the town of Columbus. On April 5, SeverCorr announced interest in the site, pending approvals from local and state governments, and federal regulatory bodies. The local communities quickly got behind the new mill; in June, more than 200 letters from residents and businesspeople in Columbus were sent to various departments in Washington, DC. The state also got behind the effort…in October of 2005, the legislature passed – and Governor Haley Barbour signed – a SeverCorr bill that provided approvals and state development funding.
As soon as the financing package closed and the site selection process was completed, earth moving equipment was quickly mobilized and site preparation began on October 3, 2005. On October 27, the SeverCorr team officially broke ground …and got out of the way in a hurry as the construction site became home to thousands of workers brought in to raise the plant in record time.
After groundbreaking, plant construction moved fast:
- In November, 2005, more than 5,000 cubic yards of concrete were poured into a cold mill foundation.
- In late January of 2006, a continuous concrete pour put nearly 4,000 yards of concrete into what would become the zinc pot in just 14 hours.
- By February 2006, more than 115 pieces of heavy equipment were on site moving dirt. In one six-day period, they moved nearly 70,000 cubic yards of earth.
- In the spring of 2006, multiple, 90-ton electric transformers where put in place to feed the plant’s melting and production operations.
- In April, the first structural steel began rising out of what was farmland only six months earlier.
- In November of 1996, the first electric motor was started and tested, and the final exterior panels were placed on the pickle line and cold mill building.
- In January of 2007, the continuous pickle line began production while the five stands of the tandem cold mill were installed.
- In early April, the five-stand Cold Mill began production
- In August of 2007, the Melt Shop and Hot Mill became operational
- SeverCorr shipped the first coil produced by the plant in mid-September of 2007
To view photos from throughout the construction, visit the Construction Update tab in this section of the Website.
The Severstal plant features the cost advantages of an “electric furnace” operation with the melt shop chemistry management and finishing mill equipment traditionally associated with the high-quality steels produced by integrated mills. At full output, the mill will produce 1.5 million tons of steel products, and an expansion program already under way will more than double that output. The major equipment supplier is SMS Demag from Germany, the leading supplier of steel mill production equipment in the world. The plant has five specific process sections:
- A melt shop that will tap 165 ton heats
- A hot mill with a continuous strip caster and a six-stand hot strip mill
- A continuous, three-stage pickling line with acid wash and cascade rinsing lines and a strip dryer.
- A cold mill with a five-stand tandem mill.
- A galvanizing line with a vertical furnace for annealing and a post-treatment section for chromating
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