Form Energy CEO Pushes Back on McGeehan Claims About Ownership
W.Va. Governor's Office Trending
WHEELING -- Form Energy's chief executive officer said Friday the company has long since parted ways with investors linked to Saudi Arabia's regime and that none of its current investors have ties to the Chinese government, a response to a Hancock County state delegate's questions about the company's funding.
In fact, Form Energy CEO Mateo Jaramillo said, the company is creating a product that China would rather it not.
Form Energy is a builder of iron-air batteries who is planning to invest $760 million at the former Weirton Steel site in Hancock County to construct a plant for its product, and create 750 local jobs in the process.
The West Virginia Economic Development Authority allocated $75 million toward the purchase of the land and the construction of buildings in Weirton for Form Energy. The state is to hold the title on the property until the 750 jobs are created there.
In addition, Form Energy is asking the state for another $217 million to make the project happen - money the state would pay Form Energy only after the company has provided the 750 jobs, according to Jaramillo.
But Delegate Patrick McGeehan, R-Hancock, has questioned Form Energy's ties to Saudi Aramco (officially the Saudi Arabian Oil Company), a state-owned enterprise of Saudi Arabia.
Jaramillo acknowledges Saudi Aramco had been an initial investor, but is no longer doing business with Form Energy.
"There is zero affiliation," he said. "They had put in about $1 million at the beginning of the company out of the $800 million or so we raised. It was clear there wasn't an alignment there.
"There are zero shares owned. There is zero interest held, and they are out."
Jaramillo added that while some investors are aligned with a business' vision, "some are not."
"It was clear they were not, so they moved out," he explained.
In addition, McGeehan expressed concerns about investors from Singapore influenced by the Chinese government.
"We definitely do not have any Chinese investors," Jaramillo said. "The investors from Singapore, they are the asset managers for foreign currency reserve funds held by the Singapore government. But there is no influence that would represent China.
"I think that's most exemplified by the fact we are doing what China would prefer that we don't - which is building a strong U.S. battery manufacturing presence in the U.S."
China at present controls the battery manufacturing industry, he continued.
"All the batteries in the laptops and phones we use today are made in China, and Form (Energy) is commercializing a battery that is made entirely from friendly resources - primarily domestic resources," Jaramillo said.
"That is very much contrary to China's interest, so it's hard to say there's very much influence there."
Form Energy is headquartered in Somerville, Massachusetts. The company also has an engineering facility in Berkeley, California, and a smaller manufacturing facility in Eighty-Four, Pennsylvania.
Jaramillo explained why the company selected Weirton as the site to be its large manufacturing facility. He said the company had looked at more than 100 sites in 12 states - and conducted simultaneous negotiations with some of them - before deciding on Weirton.
"Our battery is an iron air battery," he said. "We are reversing rusting as the main reaction, so we use a considerable amount of iron in the battery itself.
"That means at the manufacturing facility we are moving a considerable tonnage of iron. At that site - the former Weirton Steel mill - that's what they did."
Jaramillo added that the river, railway and highway access nearby also were "very suitable for doing exactly the kind of thing what wanted to do."
"Then there is the labor pool in the Northern Panhandle," he said. "It knows how to do those things, and is very strong. We were excited about the infrastructure and the human capital in the region."
Jaramillo said he had addressed questions about his investors already in Charleston when he first spoke with members of the West Virginia Economic Development Authority. It was "a lengthy discussion," he added.
"We went through a very diligent process with the state of West Virginia, and they asked all the important questions. I think we answered them to their satisfaction," Jaramillo continued.
"The structure is also protective for West Virginia. This is not a handout. This is an economic development package we receive if we deliver the jobs. If we don't, there is no money."
The Weirton Steel site "requires a lot of money to get it up to what it could be," he said.
The request for the additional $217 million for Form Energy is presently before the West Virginia, Jaramillo said the company is ready to break ground immediately in Weirton after it is approved.
"As soon as the bill has passed, we're ready to go," he said. "So there won't be any delay. Our contractors have already been selected."