October 31, 2019

SENT BY ELECTRONIC MAIL

Senator Ron Wyden

Ranking Member
Committee on Finance
United States Senate
Washington, D.C. 20510-6200

Dear Senator Wyden,

Thank you for your letter dated October 8, 2019. I have followed your career since 2007.
At that time, I was the President of the 4th largest American steel company. You stood up for
your constituents that year and I’ve been one of your biggest fans ever since.

I would like to invite you to Ashland, Kentucky to see the company, our community, and
the beautiful people. We would welcome your help.

America has become divisive. In Northeast Kentucky we aren’t about politics. The
impact studies predict 38,000 families in three states will benefit from our greenfield project.
They need us. We support every legislator regardless of political party that can help us help
them.

When the Kentucky State Senate and House voted to invest Commonwealth money in
Braidy Industries, Inc. (“Braidy Industries”) a couple of years ago the vote was 128-0 in favor.
In Kentucky that is a rare occurrence.

Furthermore, climate change is real. We have taken a strong public stand leading our
industry to lower its carbon consumption. Our aging industry is a polluter. Yes, diplomats have
made progress on the climate, but not enough. Industrial leaders must stand up. I am doing so.
I invite you to help.

Your letter asked a series of questions about the history of the Braidy Atlas project,
efforts to arrange financing, and plans for the project once it is developed. Your letter requested
a response by November 1, 2019. Please find our answers below.

1544 Winchester Ave., Third Floor

Ashland, KY 41101

SFACTIVE-905416770.6
 Background to the Braidy Atlas Mill Project

Braidy Industries was incorporated in March 2017. It was formed for the purpose of
developing the first greenfield aluminum rolling mill to be built in the United States in over
35 years. The current U.S. aluminum industry has major shortcomings. There is a 4.5 million-
ton shortage of aluminum in the United States and accompanying shortages in automotive sheet
and in food and beverage can stock. The United States is accordingly the world’s largest
aluminum importer, and no U.S. domestic smelter currently delivers low-carbon aluminum slabs.
Finally, the United States, on average, has the oldest mills of the world’s developed nations, with
the average age of U.S. rolling mills being 70 years old and presenting serious environmental
remediation concerns. With these issues in mind, Braidy Industries was formed with the intent
to build in the United States the world’s lowest cost aluminum rolling mill, which produces high
quality, low carbon aluminum for the U.S. automobile industry and for the food and beverage
industry.

A few short weeks after the incorporation of Braidy Industries, the state legislature of the
Commonwealth of Kentucky unanimously enacted legislation for the state to invest in Braidy
Industries as an equity investor through its state-funded venture fund, Commonwealth Seed
Capital, LLC (“CSC”). Following that decision, Braidy Industries selected a 240-acre location
just outside Ashland, Kentucky, a city that is close to the border of Kentucky, Ohio, and West
Virginia, within a region generally referred to as Appalachia, to build the greenfield aluminum
rolling mill. Formerly a center of steel and coal-mining production, significant job loss has left
the area devastated, economically and emotionally. The actual location is a reclaimed
abandoned coal strip mine. Against this backdrop, Braidy Atlas (as defined below) and its
aluminum rolling mill will create 1,500 construction jobs, 650 new permanent advanced
manufacturing jobs in Appalachia, and approximately 3,600 additional jobs in surrounding
communities. Braidy Industries and Ashland Community & Technical College have since
collaborated to launch a two-year workforce development program to help train potential
employees for future employment at the mill. The first graduates from the program will be
available for work when the Braidy Atlas mill opens. The mill is expected to contribute
$2.8 billion to the Commonwealth of Kentucky and $1.54 billion to Eastern Kentucky by 2021.

The mill itself, once constructed and operational, will produce 3xxx, 5xxx, and 6xxx
aluminum sheet to be used as autosheet, common alloy sheet (for building and construction
applications and truck trailers), and can sheet (for food and beverage). The mill is not being
designed to produce aerospace plate nor military grade aluminum sheet or plate and will lack the
equipment necessary to manufacture products specifically designed for military or aerospace
applications to any customers, including any direct or indirect sales to the U.S. Department of
Defense. Furthermore, it will be built with European-origin, commercial-off-the-shelf
technology that is already available to others outside of the United States. The melting, casting,
rolling, and heat-treating technology being considered has all been installed and in operation at
several locations around the world.

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 The demand for lighter, more fuel-efficient vehicles has created a structural shortage of
rolled aluminum products for automotive, truck trailer, beverage can, and other common
commercial alloy end markets. Even with the planned capacity of the Braidy Atlas mill, the
forecasted U.S. market needs will still exceed domestic supply. Given these market conditions,
the aluminum rolling mill will be designed and constructed to provide low cost, high quality,
environmentally responsible aluminum sheet products primarily for the automotive industry.
Potential customers could include companies such as BMW in Spartanburg, South Carolina,
General Motors in Detroit, Michigan, Toyota in Georgetown, Kentucky, Coca-Cola, or PepsiCo
in one of many locations, or a company like Wabash National in Indiana.

Once the aluminum mill is operational, “prime” aluminum will be fed into furnaces,
mixed with much larger amounts of automotive and food and beverage can scrap, to produce a
“slab” of thick aluminum. Hot-mill machinery will then roll this slab into very thin sheet
aluminum. Thereafter, it will be wound into a coil and delivered to future customers. Customers
would then unwind that coil, make their respective products, and fill up the same truck that
delivers the coil with scrap, to be returned to the Braidy Atlas mill for reuse in this process.

The project plans to incorporate the latest technology in regenerative burners and
emissions control equipment. The equipment providers are world-leading suppliers of mill
equipment in their respective fields. The machines are standard design that have been built and
installed in aluminum rolling mills elsewhere in the United States and internationally.

One of the other issues facing the U.S. aluminum industry is that there is currently a lack
of domestic supply for the aluminum sheet products, metal distribution companies that sell into
the automotive, truck trailer and architectural panel markets; consequently, U.S. companies need
to import much of this product from China. This U.S. demand strengthens the Chinese
aluminum market. In contrast, the Braidy Atlas mill will not obtain supplies of aluminum from
China. Nor will it be impaired by the lack of domestic supply.

Construction and Capital Raising

During the second half of 2017, after it raised initial capital from CSC and other angel
investors that enabled Braidy Industries to begin moving forward with the development of the
aluminum rolling mill, Braidy Industries acquired the land upon which the mill will be
constructed, began negotiations with the equipment suppliers and the construction contractors,
and set about to raise capital in support of the construction. Braidy Industries also commenced
work on obtaining permits needed for the construction. Specifically, Braidy Industries sought
and obtained the following permits:

• Kentucky Division for Air Quality issued an Air Permit to Braidy Industries on June 19,
2018;
• Letters of concurrence to the EastPark Industrial Authority to demonstrate that it does not
have issues with Endangered Species (U.S. Fish & Wildlife), dated July 21, 2015; or
Historic Artifacts (Kentucky Historical Preservation Office), dated July 20, 2015;
• A potential contractor, Kiewit, on behalf of Braidy Industries, obtained the Storm Water
Pollution Prevention Plan for the site work (to date, some earth movement only) that
began in the fall of 2018.

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 In March 2018, Braidy Industries successfully completed its second capital raise from
various investors in furtherance of its development efforts. This further enabled the following
activities with regard to the aluminum rolling mill. Braidy Industries engaged with several
U.S.‑based Engineering, Procurement, and Construction (“EPC”) contractors, until recently
identifying one to assist with the construction going forward. Following on that, Braidy
Industries entered into two preliminary agreements, signing Braidy Atlas as the party to both,
with equipment suppliers pertaining to the construction design of the aluminum mill, but has not
yet entered into equipment supply or construction agreements. Braidy Industries also conducted
geotechnical studies of the site and defined and estimated the plant equipment that will be
required. Braidy Industries engaged with third-party advisors to perform an independent review
of the plans. Braidy Industries also initiated securing utility contracts for the mill.

By the second half of 2018, as a result of these activities, Braidy Industries had
determined that the total estimated cost of the mill was expected to be approximately
$1.7 billion, of which approximately $580 million was expected to be for equipment purchases.
As for the financing of the construction of the mill, Braidy Industries determined that a minimum
of $500 million of the $1.7 billion would need to be raised as cash equity. Braidy Industries also
determined that the mill should be constructed, owned, and operated by a separate entity. As a
result, Braidy Industries formed Braidy Atlas, LLC (“Braidy Atlas”) as a wholly-owned
subsidiary in August 2018.

Braidy Atlas had no physical assets or employees at its formation or prior to April 2019.
Rather, Braidy Industries held the land associated with the project. As of April 2019, the only
commercial agreements that Braidy Atlas had were two preliminary, or early work, agreements
with two equipment suppliers, SMS Group GmBH and EBNER Industrieofenbau GmBH. These
agreements had not resulted in the acquisition of any equipment by Braidy Atlas at that point.

Beginning in 2018, Braidy Industries was engaging in preliminary discussions with

American and German automakers, truck trailer manufacturers, and roughly ten of the largest
U.S. metal service centers companies, to explore market interest and understand what will be
required to ensure the mill design allows for early qualification of the first deliveries.
Furthermore, with the demand of aluminum growing, there is an increasing need for high quality
and low-cost aluminum supply for domestic manufacturers within the continental United States.
The news of the proposed Braidy Atlas mill precipitated a flood of potential customers that
reached out to Braidy Industries seeking a business relationship, due to the lack of domestic
supply. Currently, with a lack of domestic supply for the aluminum sheet products, metal
distribution companies that sell into the automotive, truck trailer, and architectural panel markets
are required to import much of the product from China. The Braidy Atlas aluminum mill, once
operational, will provide a geographically favorable supply of high-quality and low-cost
domestic aluminum sheets.

In light of the need to raise a substantial amount of equity and total capital for the
construction of the aluminum rolling mill, and recognizing that its construction was going to be
beneficial to both contractors, suppliers and potential customers, in the second half of 2018,
Braidy Industries started reaching out to potential commercial parties to not only discuss possible
commercial relationships, but also the possibility of these commercial parties providing capital

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for the development and construction of the mill. A number of these commercial parties
indicated an interest in doing so.

Braidy Industries also commenced additional equity capital raising initiatives in

September 2018, including filing with the U.S. Securities and Exchange Commission (the
“SEC”) for a crowdfunding offering pursuant to SEC Regulation CF, and also for a private
placement to accredited investors offering to sell up to $401,070,006 in cash equity pursuant to
SEC Regulation D. The offering pursuant to Regulation CF remained pending until July 2019
when it closed. The company is continuing to raise capital pursuant to Regulation D.

Prime Aluminum Supply

As discussed above, the operation of an aluminum rolling mill initially involves feeding
“prime” aluminum into furnaces and mixing it with much larger amounts of automotive and food
and beverage can scrap, to produce a “slab” of thick aluminum. This requires having a source of
“prime” aluminum, which Braidy Industries was also looking for during the latter part of 2017
and through 2018, and during this timeframe, Braidy Industries commenced outreach to many of
the major suppliers of aluminum throughout the world. The Braidy Atlas mill requires having
per year 125,000 tons of slabs and 75,000 tons of P1020 Ingot. However, the North American
slab market is sold out, and there is a 4.5 million-ton shortage of prime aluminum per year in
North America. All of the existing U.S. rolling mills long ago chose their slab supply partners,
and the U.S. slab market is completely dominated by Alcoa and Rio Tinto. The largest
indication of interest Braidy Industries initially obtained was from EGA in Abu Dhabi, which
proposed a maximum of 60,000 tons per year (though not low carbon). No one else was capable
of supplying even 30,000 tons per year.

Introduction to Rusal as a Supplier of Prime Aluminum

In December 2018, a leading industry analyst who knew both Braidy Industries and Rusal
introduced them. Braidy Industries was informed that Rusal was the only company that could
supply 125,000 tons per year of high-quality, low-carbon slabs. It can do so in part because of
its new Taishet smelter in Siberia which is anticipated to be operational in 2021. To create a
market for this smelter, Rusal was looking for new customers beyond its existing customer base,
which included Arconic, a U.S. company headquartered in Pittsburgh, Pennsylvania, and
Novelis, which has received supply for its largest facility in Oswego, New York, from Rusal.
However, at the time that the introduction, Rusal was subject to U.S. sanctions. To ensure
compliance with applicable U.S. sanctions, Braidy Industries consulted with sanctions counsel to
obtain guidance on how to proceed without violating any restrictions.

In early December 2018, I had a brief introductory call with Rusal’s commercial sales
director regarding whether there were opportunities for the companies to work together in the
future once sanctions were lifted. This included a discussion of the potential supply to, and
investment in the Braidy Atlas mill. I also invited Rusal to send someone to Ashland, Kentucky,
to see what was being planned for the mill.

On December 18, 2018, Rusal’s Director of Flat Rolled Aluminum, based in the United
States, came to Ashland and received tours and briefings on the status for the enterprise build.

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He provided feedback to Braidy Industries leadership that the management team and the
company’s progress were impressive and that Rusal would continue to track the company.
During the meeting, Braidy Industries’ leadership learned that Rusal had plans to increase
production at its Siberian smelter. This meeting was introductory and for informational purposes
only, with both parties acknowledging the U.S. sanctions on Rusal restricted their ability to
engage in transactions at that point and with the understanding that the potential lifting of the
U.S. sanctions was pending.

On December 20, 2018, published news reports confirmed Braidy Industries’

understanding that the Trump administration was planning to lift sanctions on Rusal. 1 In
anticipation of the possibility that sanctions would be lifted, I made plans for an initial in-person
meeting with Rusal’s commercial sales director on January 15, 2019.

January 2019 Dinner in Zurich

On January 15, 2019, I had dinner with Rusal’s commercial sales director in Zurich,
Switzerland. Braidy Industries paid for my travel to Zurich. It is my understanding that Rusal’s
commercial sales director resides in Zurich. At the dinner, we discussed the Braidy Atlas mill
and the possibility of Rusal supplying prime aluminum to and investing in the mill. We agreed
that if the U.S. government lifted sanctions, a team from Rusal should travel to Ashland to
discuss the Braidy Atlas mill project.

Subsequent Discussions and Agreement with Rusal

With sanctions lifted on January 27, 2019, Rusal sent a team of subject matter experts to
analyze the Braidy Atlas mill project in Ashland as well as to Framingham, Massachusetts to
meet with individuals at Veloxint Corporation, another wholly owned subsidiary of Braidy
Industry focused on powder metals which Braidy Industries had acquired in 2018. The Rusal
team recommended to their senior leadership to conduct a deep due diligence process to evaluate
the possibility of investing in the Braidy Atlas mill (and not Braidy Industries or Veloxint
Corporation) and supplying the mill with its slab and ingot requirements upon commissioning.

After six weeks of intensive due diligence including senior-level meetings, Rusal and
Braidy Industries made the announcement on April 15, 2019 that subject to both companies’
board approvals, the parties had entered into a non-binding letter of intent for Rusal to make a
$200 million investment in Braidy Atlas and supply Braidy Atlas with its raw material inputs.
The respective boards approved the non-binding letter of intent on May 13, 2019 for the Rusal
board, and May 14, 2019 for the Braidy Industries board.

Following the entry into the non-binding letter of intent, the parties negotiated the
investment and prime aluminum supply agreements for Braidy Atlas. Those various agreements
were entered into by Braidy Industries, Braidy Atlas and Rusal on July 5, 2019. At that time,
Braidy Industries contributed the land into Braidy Atlas and Rusal began making its investment
into Braidy Atlas. In addition, certain Braidy Industries employees became employees of Braidy
Atlas to serve as its management, with various other functions, such as finance and accounting,
human resources and information technology, being shared from Braidy Industries to Braidy
1
See, e.g., https://www.cnbc.com/2018/12/20/rusal-us-to-lift-sanctions-from-aluminium-giant.html.

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Atlas on an outsourced basis. As a result of the investment by Rusal into Braidy Atlas, Rusal
received a 40% minority interest in Braidy Atlas. Rusal does not have control of the board of
Braidy Atlas, or over day-to-day management of this greenfield-project company. Through the
supply agreement with Braidy Atlas, although Braidy Atlas will become one of the larger
customers of Rusal, it would not be as large a customer as another U.S. company.

Because Rusal is only a minority investor in Braidy Atlas, it has no board or other
positions in Braidy Industries or any of Braidy Industries’ other subsidiaries, including Veloxint
Corporation. It also has no rights to access any information of Veloxint Corporation. Braidy
Atlas is a separate entity from both Braidy Industries and Veloxint Corporation.

The Rusal investment and the supply contract allows Braidy Atlas to create the most
sustainable aluminum production in the world for the automotive and food and beverage
industries, creating 600 permanent jobs, $2.8 billion of economic impact for Kentucky, and over
$390 million of combined economic uplift for the neighboring states of Ohio and West Virginia.
The Braidy Atlas mill will be the most environmentally sustainable aluminum rolling mill in the
United States, utilizing prime aluminum feedstock from Rusal with the lowest carbon footprint in
the world. As such, Braidy Atlas has taken a leadership role in the international coalition to
bring the aluminum industry to zero net carbon emissions by 2050. In furtherance of this, I last
month addressed the United Nations Global Climate Action Summit in New York.

As I state in my book that you mention, America For Sale: How the Foreign Pack
Circled and Devoured Esmark (Praeger, 2009), “[m]ost foreign purchases of private sector U.S.
assets are not harmful to the U.S. economy. They represent efficient reallocations of capital and
force U.S. firms to keep on their toes.” 2 As an example, Chrysler (Fiat) and Japanese entry into
the auto industry introduced competition and innovation. It forced existing competitors to
improve. This is what is happening in the aluminum industry because of Braidy Atlas.
Furthermore, “consumers benefit from more choices and pay lower prices.” 3 This is the case
with respect to Braidy and consumers. Citizens also will benefit from Braidy’s “green” approach
to production and distribution. This is an economic development to encourage, not discourage.

Additional Information Regarding Rusal

You have asked for additional information regarding Rusal and various stakeholders in it,
including Oleg Deripaska. Neither I nor any other representatives of Braidy Industries have ever
spoken with Mr. Deripaska. I also have not been informed about Mr. Deripaska’s role in
affiliates of Rusal other than as has been reported in the press as part of the resolution reached
with the United States, U.K. and EU with regard to the governance of these affiliates in order to
allow for the lifting of sanctions against Rusal. Similarly, I have no information regarding
RDIF’s relationship with Rusal or any other Russian company.

In America For Sale, I discuss various classes of cases, including intermediate inputs
such as steel and aluminum, where there may be concerns about foreign ownership. 4 I state that
the burden of proof as to the propriety of a purchase should be on a foreign purchaser “[w]hen a

2
173.
3
Id. at 174.
4
Id. at 182.

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foreign purchase would drive foreign ownership of an industry above 50 percent of U.S.
output.” 5 Here, where Rusal owns 40% of one greenfield subsidiary of a start-up company that
is still years away from being in production, any concerns contemplated in America For Sale are
not present. Regardless of any involvement of foreign investment, Braidy is going to revive the
aluminum industry, much to the benefit of consumers.

Opportunity Zones

Finally, you inquire regarding the nomination for designation by the Commonwealth of
Kentucky of census tracts that include the Braidy Atlas mill property as Opportunity Zones. The
Opportunity Zone program was enacted by the Tax Cuts and Jobs Act of 2017 which was
enacted Dec. 22, 2017. Governors had 90 days from enactment (until March 21, 2018) to send
their nominations for census tracts to be designated as Opportunity Zones. Governors could
request a 30-day extension (ending April 20, 2019) to submit their nominations. All state
selections of Opportunity Zones were certified as of June 2018. It is my understanding that Gov.
Bevin submitted Kentucky’s nominations on March 21, 2018, and that the census tract in Boyd
County upon which a portion of the Braidy Atlas mill property is located was nominated as an
Opportunity Zone, but that the census tract in Greenup County (the land straddles these two
counties as the county line runs through the property) was not nominated. It is also my
understanding that the U.S. Treasury Department certified those nominations on April 9, 2018,
designating 144 Kentucky census tracts as Opportunity Zones. Neither I nor any Braidy
representative spoke with any Kentucky or federal official regarding the nomination or
designation of the Boyd County census tract as an Opportunity Zone prior to April 9, 2018.

Conclusion

I appreciate your interest in this important project. It is expected to bring significant

economic opportunities to Northeastern Kentucky, develop a reliable source of aluminum for
domestic consumers in the automobile and packaging industries, and improve the environmental
footprint of an industry that has historically been responsible for considerable greenhouse gas
emissions and other forms of pollution.

I trust the information in this letter has been helpful in explaining why Braidy Industries
has been so proud of the support it has received across the Commonwealth of Kentucky to bring
this project to reality.

Sincerely,

Craig Bouchard
Chairman and CEO
Braidy Industries, Inc.

CC: Chairman Charles E. Grassley

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Id. at 183.