PDT Staff Writer
Thanks to several $10,000 investments by local residents, a group of local businessmen say New Steel, Inc., can now begin the process of moving forward with the necessary Hatch Study that could lead to a new steel plant in Franklin Furnace.
That group says it has the $50,000 necessary to begin the study now.
“They’re going to start the study immediately,” Portsmouth developer Jeff Albrecht said. “The rest of the money that needs to be raised would come from big time investors. They need probably $300 million from actual investors in cash in the company, or perhaps sell the power on a contract with maybe some big utility they are in discussions with might work out. But any of those investors or the utility is predicated on the Hatch Study.”
A Hatch Study is an engineering study that is similar to an appraisal that is needed when someone purchases a house, or a business gets when they are in the process of garnering a loan.
“It’s got all the information on all the processes and how much they pay for coal and how much they sell steel for and how much they’ll sell iron for,” Albrecht said. “And that is kind of the justification that the financial projections of the company are within reason. Then, of course, once you have the investors — the easy part is borrowing the billion-and-a-half. That’s the easiest part because once you get the cash investors, and the Hatch Study and the plans, and let’s not forget the permits. They’ve already got the permits in hand ready to go. Once all of those things fall in line, borrowing the big money to actually build the facility is the easy part.”
This would be the second such study in just the last several years.
“The first Hatch Study was done several years ago,” Albrecht said. “It came back very positive. It came back as a very good report for the company and now this Hatch Study is simply a renewal to bring it up to current market conditions, the current price for coal; the current price for electricity to once again evaluate the process and see what success the company has.”
Albrecht was referencing the original Hatch Study done when the Russian company MMK had planned to construct the project. That company eventually pulled out because of differences between the U.S. government and the Putin administration in Russia.
New Steel, Inc., is attempting to locate the steel processing plant in the Franklin Furnace area — a plant that not only processes steel, but produces electricity which can be sold to a utility. Local business leaders have kicked in $10,000 each, and the group is in the process of selling tickets to a dinner for $500 each to help raise more money. Because the money has come in quicker than expected, the group has decided to postpone the dinner, turning it into a victory dinner at a later date.
“I am going to go see Lisa (Carver) at the Chamber (of Commerce), and we’re going to have her e-mail the entire Chamber membership, and let the people know that have already sent in their ($500) checks or expressed the desire to be there, that we have met our goals financially at this point, and somewhere down the road, we plan to have a celebration dinner, as opposed to an investment dinner,” Rick Morgan, owner of Morgan Brothers Jewelers, said. “The $50,000 we have raised will allow them to start it. And the people behind the Hatch company are willing to start the process with that amount up front. They have reduced our price down to $145,000 or $150,000, so that is a third of the money right there. That’s the most important thing right now is getting that Hatch Study updated.”
Albrecht said the motive of area investors should not be misunderstood.
“I am so proud of the business and professional members of our community for stepping up and trying to make this happen,” Albrecht said. “There is not one person that I have talked to who is doing this really to make a profit. We’re doing this because they have made a good living in our community, and they love our community, and the love the people, and they really want to do it for the community. Everybody wants, as much as anything, to make this happen for our town.”
Frank Lewis may be reached at 740-353-3101, ext. 232, or at firstname.lastname@example.org