Russians could stymie port deal|[01/15/08]
Published 12:00 am Tuesday, January 15, 2008
A long-term deal being sought between the contract operator of cargo at the Port of Vicksburg and a SeverCorr steel mill in Columbus to use the local port as a transfer point may take longer if changes by the plant’s Russian majority investor go beyond upper-level management.
Severstal, which owns about 80 percent of the $880 million plant in east Mississippi, announced plans in December to buy out the shares of several senior SeverCorr executives, including CEO John Correnti and COO Mike Wagner. They were to be replaced by James Hrusovsky and Sergei Kuznetsov, both of the Russian steel giant’s North American affiliate.
The company announced Wednesday its purchase of minority stakeholder Baracom Limited, moving about 71 percent of the plant’s shares to Severstal.
Warren County Port Commission executive director Wayne Mansfield said Monday efforts are still alive to make the port a major player in the transfer of hot briquetted iron, or HBI, a key raw material in steelmaking. But, Mansfield said, those efforts are headed in a different direction.
“Some of the numbers involved in shipping may change,” Mansfield said, updating commissioners on the tenor of the talks and attempts to wrap up work on the T-dock loading platform to restart the unloading business at the port.
A 16,000-ton shipment was moved in October from Venezuela to Vicksburg via the Port of New Orleans, part of a test run to keep the port visible in the face of the expensive, ongoing replacement of the loading dock and to foster a lucrative business relationship between the port’s cargo operator and the steel mill.
Kinder Morgan, the county’s contract operator of the port loading and unloading facilities, had remained mum in the weeks leading up to Severstal’s announcement, but Mansfield remained confident the local port will remain in the steelmaker’s plans.
“We’re constantly working on some things we can’t talk about,” Mansfield said.
At the end of 2007, tonnage for the port through the year had dwindled to bare bones, reports showed.
Tonnage reports for November and December from Kinder Morgan showed no heavy materials were unloaded at the port, as work to replace the T-dock began in earnest.
Tallies reveal 99,791 tons were unloaded, down about 58 percent from 2006. Revenue fell from more than $1.9 million in 2006 to $1.2 million in 2007.
Commissioners approved a $184,208 pay estimate and a 19-day increase to Riverside Construction’s $3.4 million contract on the replacement. Both moves are awaiting county supervisors’ approval on Jan. 22.
Don Miller of Riverside told the board work may take another month to complete, river stages permitting. Original construction plans called for the support structure to be replaced by the end of December.
Mansfield said Kinder Morgan has stepped up talks to renegotiate terms of its port lease to reflect economic changes brought on by the construction project.
Terms call for the company to pay a base rent of $135,000 annually to the commission, providing monthly financial reports and information on its marketing and industrial recruitment attempts.
As terms were renewed last year, the port board secured an additional 8 percent if gross revenue topped $1 million and 15 percent if it surpassed $1.4 million.