EDA approves loan for transformer project

Photo by Steven Allen Adams
West Virginia Economic Development Authority Executive Director Kris Warner, right, hands Gov. Jim Justice documents to sign to approve up to $50 million in low-interest loans for the new Cleveland-Cliffs electric transformer manufacturing project in Weirton.

CHARLESTON — The Cleveland-Cliffs project to build electric transformers on the site of its previous steel manufacturing facility will get an investment from West Virginia taxpayers in the form of a low-interest loan.

The West Virginia Economic Development Authority met Monday morning and approved up to a $50 million economic incentive package for Cleveland-Cliffs Inc. through the EDA’s High Impact Development Project Fund.

Gov. Jim Justice chaired Monday’s EDA meeting before heading to Weirton to join Cleveland-Cliffs officials and local leaders for their announcement that the company with create an electrical distribution transformer production plant from the re-purposing of its Half Moon Warehouse.

“Today is a good day…I will promise you this is a great day,” Justice said during Monday’s EDA meeting. “This project is really neat. This is a home run winner in my book.”

Senate Bill 729, passed in 2022, allows the EDA to use monies in the Economic Development Project Fund for projects with investments of more than $50 million and expected creation of at least 200 permanent jobs. Cleveland-Cliffs claims its electric transformer project will be a $150 million investment by the company and create 600 union jobs.

The Cleveland-Cliffs project comes nearly six months after the company announced the closure of its tinplate manufacturing plant in Weirton, with the loss of more than 900 jobs. Cleveland-Cliffs’ Butler Works steel mill in Pennsylvania will provide raw materials for the Weirton plant, which will then manufacture the transformers.

The project is the result of talks since February between Cleveland-Cliffs CEO Lourenco Goncalves, Justice, and Department of Economic Development Cabinet Secretary Mitch Carmichael.

“What they’ve come up with to me is really neat because…I believe if we don’t watch out, our electric grid in this country is exposed beyond belief,” Justice said. “So, (Cleveland-Cliffs)…have come up with an idea of a way to do something that American companies don’t even think about doing today: changing what they’re doing in a plant and retooling and everything. Well, that’s what they’re doing, and it is fantastic in my book.”

“Cleveland-Cliffs is very intent on making this project happen quickly while they can still get in place those employees that were previously laid off,” Carmichael said. “There is all kinds of synergy with this project. I think the Governor is right in that this is a win-win-win scenario for West Virginia and for America.”

The Cleveland-Cliffs project is the latest project approved for low-interest loans through the High Impact Development Project Fund. South Korea-based electronics manufacturer LG was approved for up to $54 million in forgivable loans earlier this year for its NOVA North American Innovation Center project.

That project, aimed at assisting entrepreneurs and new business start-ups be able to bring their ideas to fruition and scale up, is estimated to create 275 high-skilled jobs in West Virginia with its $700 million investment over the next five years. According to the Charleston Gazette-Mail, LG NOVA representatives said progress towards the project was slow, with neither of the project’s two branch offices in Huntington and Morgantown opened as of last week.

The EDA also approved $66 million in low-interest loans earlier this year for several projects through the High Impact Development Project Fund, including $1.5 million for Pure Watercraft in Wellsburg, $8 million for Alcon Research for a project manufacturing intraocular lenses in Cabell County, $15 million for Clean Vision Corp. for equipment for plastic waste/feedstock conversion in Kanawha County, $7.5 million for business expansion at the Gestamp West Virginia automotive components manufacturing facility in South Charleston, $6.5 million for Morgantown-based Mountaintop Beverage LLC for food and beverage packaging, $5.5 million for SMR Technologies in Fenwick for manufacturing de-icing and other aerospace equipment, and $12 million for WATT Fuel Cell Corp. Harrison County.

Last year, the EDA approved up to $62.5 million in forgivable loans for Mountaineer GigaSystem through the High Impact Development Project program. The project would provide clean hydrogen power to chemical manufacturers, transportation companies, other electric utilities and data centers. Greenhouse gas emissions would be pumped underground. The project would also involve a biomass power plant.

Fidelis claimed last year that the Mountaineer GigaSystem facility would create 125 permanent jobs once complete, though the company also estimates the project will involve more than 5,500 construction jobs. The company estimates its investment in the state for the project at $2 billion and $105 million in annual tax revenue through personal income tax income, severance tax income, public property lease income, and royalties to the state.

At the end of 2022, Form Energy first announced it would build a manufacturing facility to make specialty batteries on the former Weirton Steel site. The new Form Energy facility will be a $760 million investment in West Virginia, with the goal of creating as many as 750 jobs. The EDA approved a $75 million economic incentive package from the High Impact Development Project Fund for the project. The total state investment will be $300 million, with another $110 million expected to go to Form once the project is complete.