‘Need to send a message.’ Bill demands repayment of $15 million given to KY aluminum mill.

Kentucky Sen. Chris McDaniel followed up on his promise to demand repayment of the state’s $15 million investment given to a company to build an aluminum mill in Eastern Kentucky.

Unity Aluminum, previously Braidy Industries, promised to build a $1.7 billion aluminum mill near Ashland after the legislature approved an unprecedented $15 million direct investment in the company in 2017.

The mill was projected to be completed in 2020 and to produce sheer aluminum for the automotive industry. It has yet to be constructed. The company promised to create 550 well-paying jobs in a region that has seen a huge decline of the coal industry.

Filed last week, Senate Bill 48 directs the Commonwealth Seed Capital, the entity within the Cabinet for Economic Development that made the investment, to recover the $15 million, along with any interest, penalties and fees, at the end of the year.

McDaniel, the sponsor of the bill and chair of the committee, said at the Senate Appropriations & Revenue Committee meeting on Wednesday morning that it is time to apply additional pressure to Unity Aluminum after “feelings of frustration and promises that have proven not to be true has reached a boiling point.”

“I want to be very clear…I don’t want the Commonwealth to get $15 million, I want Ashland to get an aluminum mill,” McDaniel, R-Taylor Mill, said.

Kentucky Senate President Robert Stivers, R-Manchester, encouraged the committee to pass the bill, but he has been given assurances that the project is moving forward, and said activity is happening this week. He said he could not discuss what those were because of NDAs and Security Exchange Commission disclosures.

“I think there is still a really good opportunity, but it is our duty to make sure everything is moving forward, and this bill will continue to keep that type of focus on it,” he said.

Last year, the legislature’s Interim Joint Committee on Appropriations and Revenue grilled Unity Aluminum leadership. Nate Haney, senior vice president of global affairs and commercial operations, said the company was “cautiously confident” after “a roller coaster ride over the last couple of years.”

Haney said he anticipated Unity would reach its fundraising goals of $1 billion and complete construction on the 240-acre property in 2025. The company in September said it had raised $165 million.

At that meeting, McDaniel told Unity leadership that two administrations and multiple General Assemblies have been “played for fools and written down the road.”

State Sen. Robin Webb, who represents the district the project will be, said she has remained a cautious optimist that this project will be completed.

“The fiscal part of me would certainly like to have the money back if there is no chance that this project comes to fruition,” Webb, D-Grayson, said.

Unity Aluminum has received several extensions from the Commonwealth Seed Capital to reach its goal before having to repay the money. The current extension runs through the end of March.

In September, Gov. Andy Beshear said he understood every lawmaker who was concerned and understood where they are coming from.

State Sen. Matt Castlen, R-Owensboro, said “we want to see an aluminum mill in this portion of Eastern Kentucky because of the amount of economic growth and jobs it brings.” He said he wonders what other projects were awarded economic incentives that never came to fruition.

“We don’t want to send a message across the Commonwealth that Kentucky is not for economic growth, but at the same time, we also need to send a message that when we loan you $15 million, we expect to see results in a timely manner,” he said.

The bill passed unanimously out of the committee.

This story was originally published January 12, 2022 at 2:37 PM.