By Bobby Harrison
Daily Journal Jackson Bureau
JACKSON – A federal lawsuit is asking that construction on Mississippi Silicon’s Burnsville plant be halted because a Brazilian company helping finance the project has allegedly engaged in unfair trade practices.
The complaint was filed Wednesday in U.S. District Court for the District of Columbia by Ohio-based Globe Metallurgical Inc., a competitor of the planned Tishomingo County company which has said it will employ 210.
The state is providing $21.5 million for building construction and workforce training, as well as a $3.5 million loan to Tishomingo County for infrastructure improvements.
The 39-page complaint alleges “a series of criminal and otherwise unlawful actions” against Brazilian-based Rima Industrial and Birmingham-based Polymet Alloys and alleges that proceeds from that criminal conduct are being used in part to construct the $200 million Mississippi Silicon plant.
Rima Holdings USA Inc. owns 80 percent of Mississippi Silicon and an affiliate of Rima Industrial.
Gary Matthews, executive director of the Tishomingo County Development Foundation, downplayed the lawsuit and charges by Globe as a competitor “trying to find an excuse to slow the project or stop it.”
Nicole Webb, a spokeswoman for Gov. Phil Bryant, also pointed out that the lawsuit was filed “by a known competitor” and added that there are “clawback” provisions in the agreement with Mississippi Silicon “that protect taxpayers in the event a company violates the terms of its agreement.”
According to the complaint, in the early 1990s Rima was cited for selling silicon in the United States at an “unfairly low” price, placing U.S. producers at a disadvantage. U.S. law prohibits foreign manufacturers from selling various commodities, such as timber and silicon metal, at prices “unfairly” lower than the prices charged by U.S. companies.
After found to be selling at “unfairly low” prices, the U.S. Department of Commerce essentially assessed a fee on Rima silicon sold in the U.S. In the early 2000s, Rima convinced the Commerce Department to revoke the finding.
But the Globe lawsuit alleges that Rima did not inform the Commerce Department that it had a U.S. partner – Polyment – that was selling the Brazilan silicone at the lower prices. Polymet, the lawsuit claims, has less than 10 employees and has connection to Rima in terms of its personnel. The lawsuit says the owners of Polymet cannot be determined because of the privacy laws in the Grand Caymen Islands where it is registered.
Plus, the lawsuit says that Rima, its chief executive officer, Ricardo Vicintin, and other members of the Vicintin family are under indictment in Brazil for various charges related in part to the use of legally protected Brazilian forests for coal to operate their plants, including potentially Mississippi Silicon.
Rima and Vicintin faces charges going back to 2010 related “to environmental crime, false statements, money laundering and tax evasion” in Brazil, according to the complaint filed by Globe in the D.C. court.
Vicintin attended the groundbreaking of Mississippi Silicon in January with the governor. Speaking on behalf of Bryant, Webb said, “Neither our office nor MDA (Mississippi Development Authority) has any prior knowledge of any charges pertaining to the company, its parent company, or any of its executives.”
The lawsuit seeks not only to halt construction of Mississippi Silicon, but also to receive monetary damages.
Keith Turner, a Jackson attorney with Watkins & Eager, representing Mississippi Silicon, said Globe has tried at various steps in the process to stop the construction of the Tishomingo County facility, including trying to challenge the awarding of environmental permits for construction.
He said the lawsuit was “another example of Globe’s continuing effort to try to stop a potential competitor.”
David Tuten, president and CEO of Mississippi Silicon, said Wednesday he was not familiar with the allegations made against his company or Rima by Globe. He said work is continuing on the plant that is scheduled to be in operation in late July 2015.
It will produce silicon metal for a variety of industries in the U.S. and Canada including aluminum, automotive and chemical. Some materials also could go to Japan and South Korea.