In Michigan
6:13 pm
Fri January 6, 2012

Feds cancel $730M loan for Michigan steel project

DEARBORN, MI –

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 report Friday that the conditional loan for the Severstal North America project in Dearborn won't be finalized.

A steel company spokeswoman says the company is "deeply disappointed" by the decision.

The Energy Department didn't detail reasons for cancelling the loan. A department spokesman says the project has "merit" but not all projects that receive conditional commitments get green-lighted.

The planned loan to modernize the plant was announced in July.

The project was expected to employ around 2,500 construction workers and create 260 factory jobs.

Severstal bought the Dearborn factory in 2004.