EVELETH — The Iron Range Resources & Rehabilitation Board on Friday will consider authorizing $26 million in public money for a startup biotechnology company in Rochester, N.Y., that wants to locate a facility in Mountain Iron.
The public funding would include a direct $18 million agency loan to Sweetwater Energy Inc., to help secure commercial debt for the $52,860,563 project.
The meeting begins at 2:30 p.m. in the IRRRB’s administrative room.
The project would initially create 35 jobs when the first of four plant modules is expected to be in operation by the end of 2018, and grow to 105 when three other planned modules are built and brought online, according to IRRRB officials.
There would also be an economic benefit for the Range’s loggers because Sweetwater’s pattented technology produces cellulosic sugars using wood as its feedstock. The plant would be located near the Laurentian Energy wood yard in Mountain Iron.
Here’s a breakdown of financing for the venture:
• $18 million, 15-year IRRRB loan.
• $16,288,450 in commercial debt, with terms to be negotiated.
• $6 million in a 21st Century Fund loan.
• $1 million in an Agriculture & Economic Development Board loan.
• $10,572,113 in private equity.
IRRRB Commissioner Mark Phillips, in an interview on Wednesday, said he believes in the project and is “hopeful” and “confident” it will succeed.
But he acknowledges there is risk.
“There are lots of trigger points for the financing. Our dollars are bait for equity and commercial debt. We are saying, ‘Here’s what you have to do.’ We’ve laid out the ground rules,” Phillips said.
Phillips said “we’ve been after this for a long time,” referring to the IRRRB and the Department of Employment and Economic Development, which administers the 21st Century Minerals Fund. “We will be as careful as we possibly can.”
Phillips said biotechnology “is a hot industry now. The entrepreneurs seem to be going where the incentives are.”
The initial feedstock capacity will be 150 dry tons of biomass a day. Annual production of the first module is expected to be 29,000 tons of cellulosic sugar and 22,000 tons of clean lignin fiber.
Two additional production modules are projected to be online in 2019, with a fourth module planned for 2020.
When all four modules are in production, annual wood consumption will be about 200,000 cords.
Sweetwater’s sugars can supplement, or replace, the sugars that are used in the production of multiple industrial biochemical and alcohols and other products.
They are used in products such as fuels, lubricants, hoses, spandex, upholstery, fibers, fabrics, beverage packaging, detergents, insulation, pharmaceuticals, cosmetics and disinfectants.
Company officials said the plant would us gas-fired boilers that would generate steam for the process. They say the process does not produce emission odors or particulates.
County officials have said Highway 169 and Mineral Avenue can handle additional logging traffic of 15 to 18 trucks per day; 13 supply trucks per week; 24 trucks of finished product per week; and co-product shipping of eight trucks per week.
Sweetwater was founded in 2006.
The company’s core technology was originally developed by oil industry experts and has been tested extensively at the National Renewable Energy Laboratories.
Sweetwater has perfected that technology to provide an alternative to petroleum and food-based chemicals.
The company has entered into long-term agreements with three companies to provide them with sugars.
Much of the Sweetwater management team has worked together for many years on other successful business operations.
Phillips said three Sweetwater officials are expected at Friday’s meeting.