Mississippi extending sweet deal to coal-to-fuels plant

The state of Mississippi is taking unusually dramatic steps to help coal-to-fuels company Rentech (AMEX: RTK) build a facility there.

Today Rentech announced that the Mississippi Business Finance Corporation has approved an inducement resolution for up to $2.75 billion of tax-exempt and taxable Industrial Development Revenue for Rentech, Inc. and its subcontractors.

It's the largest inducement resolution ever approved by the Mississippi Business Finance Corporation, and the first step in the process for the State of Mississippi to issue bonds to finance Rentech's proposed ultra clean synthetic fuels and chemical complex in Natchez, Mississippi.

"The inducement and sales and use tax exemptions from the state are indicative of Mississippi's support for our Natchez project and have the potential to reduce our costs by millions of dollars. They are also instrumental in moving the project forward," said D. Hunt Ramsbottom, Rentech's President and CEO.

In addition, the local county has entered into an option agreement with Rentech to acquire the land on which Rentech plans to locate the complex. The company says it will be conducting additional due diligence before making a final decision on whether to purchase the site.

Rentech uses a variation of the Fischer-Tropsch process to convert petroleum coke, coal and biomass into synthetic fuels.

The facility is to initially produce 25,000 barrels per day, and have the potential to expand to 50,000 barrels per day. Plans call for the proposed complex to sequester the carbon dioxide captured during the production process.

Rentech has been in the alternative fuels and chemicals business since 1981.

Rentech is not associated with U.S. Sustainable Energy (PINKSHEETS: USSE), also based in Natchez, Mississippi.