Japanese company studies multimillion-dollar Vinton Steel mill expansion in El Paso County

Officials with the Japanese company that owns the Vinton Steel minimill are considering a $420.5 million expansion of the 62-year-old facility located in El Paso County’s Upper Valley.

The expansion would replace the steel mill’s two electric arc furnaces with a new, state-of-the-art furnace, construct 1.5 million square feet of new buildings, and make other improvements that would double the facility’s production of steel products from recycled steel, according to Vinton Steel’s application for a Texas economic incentive program.

The new furnace would be designed to reduce greenhouse gas emissions and also reduce electricity consumption.

The minimill turns old motor vehicles, discarded major household appliances, and industrial scrap metal into new steel products – reinforcing steel bars, or rebar, grinding steel balls and smooth steel bars for industrial construction and mining industries.

The facility is located on about 230 acres along Interstate 10 and near Vinton Road. Besides the steel mill, the facility also includes metal scrap processing, a rolling steel mill, and grinding steel ball mill, according to company information.

Kyoei Steel board weighs competing plans

Whether the expansion will be done won’t be known until the middle to late August when the Kyoei Steel Ltd., board of directors is expected to make a decision, said Eduardo Gonzalez, who oversees Vinton Steel as assistant vice president.

Company officials won't discuss details of the possible expansion until the board makes a decision, said Gonzalez, who has worked for Vinton Steel about 15 years.

If the expansion isn't approved, then other options will be considered, Gonzalez said. However, he declined to provide details about the other options.

Officials with Kyoei, a 75-year-old company based in Oska, Japan, are considering other sites for the steel mill expansion besides Vinton: A group's proposal for a new steel mill in the Miami, Florida area, and Kyoei's AltaSteel mill in Edmonton, Canada, according to the company’s state incentive application filed in April with the Texas comptroller's office and other company information. The application is for the Texas Jobs, Energy, Technology and Innovation Act, or JETI, economic incentive program.

Part of the expansion competition is Kyoei's possible acquisition of another steel mill in the United States, Gonzalez said. The name of the possible acquisition has not been disclosed, he said.

The company is being offered incentives at all the possible sites, including millions of dollars of possible property tax incentives from the village of Vinton and El Paso County, according to the application.

Kyoei Steel purchased Vinton Steel in December 2016 for $52 million from Black Diamond Capital Management, a Connecticut-based investment and business turnaround firm.

Vinton is Kyoei’s only steel mill in the United States. It also has the one in Canada, and several steel mills in Vitenam and Japan.

Vinton Steel employs 356 people

Vinton Steel, which currently employs 356 people, is a major employer in the El Paso area and important to the area economy and for Vinton, a community of about 2,800 people, near the New Mexico state line.

The application indicates possible growth in jobs from the expansion, but job numbers and other details are not final because the company is negotiating terms of possible incentives with the county and others, Gonzalez said.

Vinton facility has record of safety problems

The steel mill has a tarnished safety record.

In April 2022, it was placed in the U.S. Occupational Safety and Health Administration, or OSHA, Severe Violator Enforcement Program because it had 10 safety issues over five years, including five amputation injuries. It remains in that program today. It also was cited for 19 safety violations in April 2022.

On May 4, 2022, Kyoei Steel officials agreed to pay a negotiated fine of $250,000 and corrected the 19 safety violations at the Vinton facility, OSHA information shows.

In October 2010, prior to Kyoei Steel buying the steel mill, an explosion at the facility killed a worker, according to El Paso Times archives.

Changes have been made at the facility in recent years to fix safety problems, Gonzalez said.

Vinton, El Paso County offer incentives

The village of Vinton and El Paso County have offered almost $19 million in unspecified property-tax incentives for Kyoei Steel to expand the Vinton facility, according to Vinton Steel’s application.

Vinton and El Paso County officials declined to comment on the possible expansion.

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The county’s proposed $7.4 million worth of incentives reported in the application are “preliminary and have changed as we have not yet finalized the negotiations,” Desiree Gonzalez, a county spokesperson, said in an email.

Vinton officials have offered incentives of $11.6 million, the application shows.

Under the Texas JETI program, Vinton Steel could get a property tax appraisal decrease for 10 years with the Canutillo Independent School District. The company also has applied for a Texas Enterprise Fund grant.

Vic Kolenc may be reached at 915-546-6421; vkolenc@elpasotimes.com ; @vickolenc on Twitter , now known as X.

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This article originally appeared on El Paso Times: Japanese company studies multimillion-dollar Vinton Steel mill expansion in El Paso County