One Indiana senator said he was pleased with a recent decision from the U.S. Department of Energy to end a conditional loan commitment to steel producer Severstal.
In July, the Department of Energy issued a $730 million loan to Severstal North America Inc. under the department's Advanced Technology Vehicle Manufacturing Program to produce high strength, lightweight steel in Dearborn, Mich.
Republican Sen. Dan Coats said in a statement issued Friday that six companies already make the products that Severstal received a loan to produce including ArcelorMittal, Steel Dynamics Inc. and United States Steel Corp. in Indiana. ArcelorMittal and U.S. Steel make the products in Northwest Indiana.
Higher strength steel products have been made in the United States since the 1980s and Coats said current capacity is higher than market demand at this point.
"This announcement is a victory for taxpayers and steel manufacturers in Indiana," Coats said. "The Severstal loan commitment never passed the sniff test, as multiple producers are already manufacturing this high strength steel without taxpayer financing. This is another example of why the government should not be in the business of picking winners and losers."
Coats first raised concerns about the loan in a letter to Energy Secretary Steven Chu last year and asked whether the department conducted appropriate market analysis before issuing its loan commitment.
A spokeswoman for Severstal North America, a subsidiary of Russian-based OAO Severstal, said in November the company met every requirement for the federal loan and was involved in a two-year due diligence process.