Feb 01, 2023

Corn milling project halted in North Dakota due to security concerns

US Air Force letter to senator cites ‘near- and long-term risks’ to its operations.

A controversial Chinese-owned agricultural project in America’s northern plains appears headed for cancellation after the U.S. Air Force and local officials acted on concerns that the venture might be a threat to national security.

The $700 million corn mill project by Chinese company Fufeng would be 12 miles from a U.S. Air Force base in Grand Forks, North Dakota.

U.S. Air Force officials raised national security concerns in a letter released Tuesday, and the mayor of Grand Forks and the governor of North Dakota have concluded the project should be halted.

Mayor and governor react

Brandon Bochenski, the mayor of Grand Forks city in North Dakota, on Tuesday issued a statement to the media asserting that the proposed corn mill project by Fufeng USA, a subsidiary of China’s agribusiness giant Fufeng, “should be stopped."

“The federal government has requested the city’s help in stopping the project as geo-political tensions have greatly increased since the initial announcement of the project,” he added.

North Dakota Gov. Doug Burgum also released a statement supporting the decision to stop the project.

"Given these concerns, we support the decision by the City of Grand Forks to initiate steps to stop the project with Fufeng Group and will support the city in finding another partner for a corn milling operation," said Burgum.

Burgum thanked the mayor and city officials "for their leadership and proactive due diligence throughout this lengthy process."

"The state of North Dakota stands ready to assist the city in exploring additional opportunities for value-added agriculture. As our farmers who compete in global markets know, agriculture is a global business, and North Dakota welcomes investment from domestic companies and our friends and allies."

Corn milling project details

According to reports, the planned project by Chinese-based Fufeng Group has divided the community and helped spark efforts in Congress and in states around the country to ban Chinese investment in real estate.

Fufeng has been working since late 2021 to develop a 370-acre tract on the northern edge of Grand Forks to build a corn mill that would process as much as 25 million bushels of corn.

When the facility was announced in 2021, there was excitement for the hundreds of new jobs that might come. Doubts about the plant began to multiply, however, and focused on its links to the Chinese government, concerns about the environment and frustration from future neighbors.

In November 2021, Fufeng Group chose Grand Forks for its first U.S.-based manufacturing facility. Fufeng is a global player in bio-fermentation -- manufacturing products that serve animal nutrition, food and beverage, pharmaceutical, health and wellness, oil and gas, and other industries.

Fufeng Group conducted an extensive nationwide search for a suitable location that could support the project with 25 sites ultimately being submitted by local governments for consideration.

U.S. Air Force concerns, senators reactions

The letter from Air Force leadership was addressed to North Dakota Sens. John Hoeven and Kevin Cramer and notes the Grand Forks Air Force Base is the center of military activities related to both air and space operations.

The letter states the Committee on Foreign Investment in the United States (CFIUS) considered an October 2022 filing by the Fufeng Group on the corn milling project, and that "while CFIUS concluded it did not have jurisdiction, the department's view was unambiguous: the proposed project presents a significant threat to national security with both near- and long-term risks of significant impacts to our operations in the area."

Part of the Department of the Treasury, CFIUS is an interagency committee authorized to review certain transactions involving foreign investment in the U.S. and certain real estate transactions by foreign persons, in order to determine the effect of such transactions on the national security of the U.S.

Cramer joined Hoeven in a statement regarding the Fufeng project.

"City leaders have asked for clarity from leaders in the federal government regarding the Fufeng project," the senators said. "The Air Force left ambiguity off the table when they said the proposed project presents a significant threat to national security.

"As we have recommended, we believe the city should discontinue the Fufeng project and instead we should work together to find an American company to develop the agriculture project."

Lisa Cleaver

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