BROWNSVILLE, RGV – The Port of Brownsville’s senior director of marketing and business development believes the port is in with a good chance of landing Big River Steel’s second steel mill.
Steve Tyndal gave a presentation about the port at Texas Southmost College to five site selectors from Germany.
“I think our chances are good. We’re one of two sites that have made the final selection process,” Tyndal told the Rio Grande Guardian, at the end of his remarks to the site selectors.
The five site selectors are associated with the European American Investment Council and specialize in helping manufacturing companies from Europe expand into North America. They made 21 stops around the Rio Grande Valley in just over two full days thanks to a tour organized by Rio South Texas Economic Council. The tour included a drive through the Port of Brownsville, with Port Director Eddie Campirano driving the bus and he and Tyndal giving commentary.
Big River Steel is based in Osceola, Arkansas. “It has a completely self-contained LEED-certified mill. The only one of its kind in the United States. This would be the second. This would be an exciting opportunity for us,” Tyndal said.
LEED (Leadership in Energy and Environmental Design) is an internationally recognized green building certification system, providing third-party verification that a building or community was designed and built using strategies aimed at improving performance across all the metrics that matter most: energy savings, water efficiency, CO2 emissions reduction, improved indoor environmental quality, and stewardship of resources and sensitivity to their impacts.
While Big River Steel’s second steel mill is far from a secure deal, Tyndal believes the Port of Brownsville stands a good chance because of its location and what the company intends to do with the steel.
“I think our chances are good. We’re one of two sites that have made the final selection process. Because of what Big River Steel intends to do with the steel, which is to support the auto industry and our location to support both U.S. and Mexico markets, we are better logistically situated than our competitor. So, we feel very confident that if that is going to be a key decision-making criterion that we stand a good chance,” Tyndal told the Rio Grande Guardian.
“Big River Steel thinks that there’s an opportunity for them to work in the auto industries and the white appliance markets in Mexico. I can’t speak for them with total knowledge of what their market strategies are, but I think the unique opportunity for this region is the $1.5 billion investment required to build the mill and the 500 jobs that it would create with a guaranteed minimum salary of $75,000 each plus bonuses.”
According to Big River Steel’s official website, the company is known for the world’s first Flex Mill, a steel mini mill focused on the production of a wide product spectrum, including advanced automotive and electrical steels.
Asked what sort of steel mill Big River Steel might build at the Port of Brownsville, Tyndal said:
“This is not a steel mill that some people might equate with mills in places like Pittsburgh. This is a clean mill with low emissions. It’s basically a make-on-demand type of steel mill. Their customers tell them the type of steel and the format that they want, and they make it. And because Big River Steel considers themselves a technology company first and a steel company second, it’s second nature for them to do that.”
Tyndal told the Rio Grande Guardian that based on the limited information and feedback he is getting all the indications are quite positive that Brownsville will be the chosen location for the new steel mill. He said the Port of Brownsville might expect a decision the middle of this year if not sooner.
Liquefied Natural Gas
Another topic Tyndal covered during his presentation to the site selectors and VIPs from the Valley was the possibility of one or more Texas Liquefied Natural Gas (LNG) export terminals being built at the Port of Brownsville.
One of the three companies looking at building such a terminal at the Brownsville port is Texas LNG. According to Texas LNG’s website, natural gas is the cleanest burning fossil fuel and can be used to safely generate electricity in households. Tyndal said other industries would be attracted to the region in support of the LNGs.
“The investment opportunities represented by all three LNG plants would be $38.75 billion. Because the projects are large in scale they could take seven to 10 years to complete,” Tyndal told the Rio Grande Guardian, after his presentation. “So, thousands of construction jobs, hundreds of full-time jobs when the plants are up and running. There will be lots of new businesses coming here bringing with them the demand for more and better trained workforce.”
Asked what the economic impact would be if the Port of Brownsville landed both a steel mill and an LNG export terminal, Tyndal said: “It’s not just the port that will be impacted. It’s really going to change the Valley because it’s going to change income opportunities that don’t presently exist. It’s going to create new tax bases that will have an important effect long term on how governments can fund public services, which may mean that property taxes may go down eventually. Sales taxes will go up and so those are the type of impacts that I think are hard to measure.”
Deepening the ship channel
The final topic Tyndal discussed was the deepening of the channel. Currently, the Port of Brownsville has a depth of 42 feet. They received congressional authorization to deepen the channel to 52 feet.
“If you have one more inch of draft, a ship bringing in grain with just one more inch of draft could bring in 179 additional tons valued at about $30,000 in that single ship which means the cost of goods coming into the port is reduced,” Tyndal said. “Another way to consider it is John Deere Tractors. If John Deere had another inch on a ship delivering tractors to the port they can bring in another 36 tractors valued at $24 million. If we go 10ft deeper, just think of the economic scale we’ll be able to offer our customers and the number of jobs that that will translate to.”
However, one obstacle the Port of Brownsville is facing is federal funding for the project. Eduardo Campirano, port director and CEO of the Port of Brownsville says the federal share of the project is about $125 to $130 million but will be very difficult to achieve. One approach to show the federal government that the deepening of the channel is necessary are the conversations about LNGs and the steel mill.
“If they’re going to build their facilities and so forth, we’re certainly going to want to leverage that investment to accelerate the construction of the project and the completion of the project,” Campirano said. “But at the end of the day it’s getting participation from the federal government or the federal share of that project.”
Ideally, the deepening of the channel will be complete by 2022 or 2023—19 miles in length and 52 feet deep.
The Port of Brownsville is 82-years-old and some of the port’s facilities date back that that origin. Tyndal says in order for the port to fulfill its potential as a sea port then the port must be able to grow its infrastructure to satisfy today’s modern and pressing demands in the maritime industry. The steel plant, LNGs and deepening of the channel located on or near the port can bring in new revenue that will give the Port of Brownsville the opportunity to grow.
“[These projects are] really going to change the Valley because it’s going to change income opportunities that don’t presently exist,” Tyndal said. “It’s going to create new tax basis that will have an important effect long term and how governments can fund public services which may mean that property taxes may go down eventually. Sales taxes will go up and so those are the type of impacts that I think are hard to measure.”
Asked what he thought about the visit of the five site selectors from Europe, Tyndal said: “They all come with a bit of curiosity, but they all leave with a lot more knowledge and enthusiasm with what the Valley has to offer.”
Editor’s Note: The main image accompanying the above story shows Big River Steel’s mill in Osceola, Arkansas.
Editor’s Note: Reporter Steve Taylor contributed to this story from Brownsville, Texas.