Plant would focus on new steel technology

New Steel International seeks $7 billion federal loan

Massive project has been subject of wide speculation

An Ohio-based steel technology firm is the mystery company leading an effort to acquire options to purchase nearly 1,000 acres of Shiawassee County farm land to build a massive steel-making plant along I-69 in Durand, Crain's has learned.

New Steel International Inc. CEO John Schultes confirmed Monday that his company is one of several pursuing a project to build a multibillion-dollar manufacturing facility that it has kept under wraps for months using the code name "Project Tim."

"It's a little too early to really go public with things," Schultes said in a telephone interview with Crain's. "There are a lot of companies trying to make this happen."

New Steel International has sought a $7 billion federal loan through the U.S. Department of Energy's Advanced Technology Vehicles Manufacturing Loan Program for construction of a plant in Durand that would produce new high-strength steel, according to a source briefed on the company's plans.

Schultes confirmed New Steel International has applied for a Department of Energy loan, but declined to divulge the amount or details of the application.

The Advanced Technology Vehicles Manufacturing Loan Program was created by Congress in 2008 at the height of the financial crisis to help automotive companies finance development of new energy-saving technology.

Ford Motor Co. borrowed $5.9 billion from the $25 billion loan fund for updating manufacturing facilities that produce fuel-efficient cars and light trucks, including plants in Dearborn, Flat Rock, Livonia, Sterling Heights, Wayne, Ypsilanti, according to the federal energy agency.

A Department of Energy spokesperson declined to comment on the application.

The source briefed on the company's plans said Schultes has told members of Michigan's congressional delegation that the project has "investor interest" from General Motors Co., Tesla Inc. and DTE Energy Co.

A GM spokesman declined to comment.

In a meeting last week in Washington, D.C., company representatives portrayed the Durand project as a state-of-the-art steel plant that would use clean coal-burning technology to melt iron pellets and capture a portion of the energy emitted in the steel-making process for electricity, according to a source.

The company has portrayed the project as having a renewable energy component.

Schultes declined to discuss investors and potential customers of the plant's steel or renewable energy when asked specifically whether GM, Tesla and DTE were involved in the project.

"Whoever is telling you all of this is certainly well informed, but I'm not going to confirm or deny it," Schultes told a Crain's reporter.