DEARBORN, Michigan — The U.S. Energy Department won't follow through on a planned $730 million loan to the North American arm of one of Russia's largest steel companies to modernize its Detroit-area plant.
The Detroit News and Detroit Free Press reported Friday that the conditional loan for the Severstal North America project in Dearborn wouldn't be finalized.
Steel company spokeswoman Katya Pruett said Severstal was "deeply disappointed" by the decision. She said the company would review other financing options to move forward with its plans.
About 60 percent of the project has been completed, but the company was waiting on final loan approval to finish it.
The Energy Department didn't specify reasons for not giving final approval for the loan. Department spokesman Damien LaVera said the project has "merit" but not all projects that receive conditional commitments get green-lighted.
"The additional due diligence the department conducts after a conditional commitment is signed is an important part of the process and is vital to protecting the taxpayers," he said.
Some Republican lawmakers criticized the conditional approval. California Rep. Darrell Issa compared the loan to the government's $528 million loan to solar panel maker Solyndra, which filed for bankruptcy court protection last year.
Detroit-area Democratic Rep. John Dingell urged the Energy Department in a statement not to "turn their back on projects that create in-demand, well-paying jobs like Severstal."
The planned loan to modernize the plant was announced in July. The project was expected to employ about 2,500 construction workers and create 260 factory jobs.
Severstal bought the Dearborn factory in 2004.
A Message from The Moscow Times:
Dear readers,
We are facing unprecedented challenges. Russia's Prosecutor General's Office has designated The Moscow Times as an "undesirable" organization, criminalizing our work and putting our staff at risk of prosecution. This follows our earlier unjust labeling as a "foreign agent."
These actions are direct attempts to silence independent journalism in Russia. The authorities claim our work "discredits the decisions of the Russian leadership." We see things differently: we strive to provide accurate, unbiased reporting on Russia.
We, the journalists of The Moscow Times, refuse to be silenced. But to continue our work, we need your help.
Your support, no matter how small, makes a world of difference. If you can, please support us monthly starting from just $2. It's quick to set up, and every contribution makes a significant impact.
By supporting The Moscow Times, you're defending open, independent journalism in the face of repression. Thank you for standing with us.
Remind me later.
