U.S. Steel, which completed its purchase of the mill last year for almost $1.5 billion, has big plans for the site: It aims to pour an additional $3 billion into the operation by 2024, doubling capacity. That would make the steel plant the country’s biggest—and the heart of the company’s operations. The area “is becoming the steel capital of the United States,” says Dan Brown, the plant’s chief operating officer. “We’re a much different company today, and we’re headed in my mind in the right direction.”

Three months after completing the purchase of Big River, U.S. Steel told shareholders of plans to cancel a $1.3 billion plan to upgrade Mon Valley, the company’s flagship plant, where founder Andrew Carnegie built his first mill in the 1870s. The company says Big River isn’t meant to replace operations farther north—though executives these days frequently say the goal is to get “better, not bigger.”

Earlier this year, lawmakers in Arkansas passed an incentive package for U.S. Steel through recycling tax credits that could give the company up to $11 million in tax breaks annually for 14 years.

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Ownership of Big River’s Osceola, Ark., mill will give U.S. Steel access to the same production process used by competitors Nucor Corp. and Steel Dynamics Inc., two of the most profitable companies in the domestic steel industry. The company has said the acquisition is the centerpiece of its drive to raise profit by investing in electric furnaces that melt scrap, which are known in the steel industry as minimills.

U.S. Steel bought a 49.9 percent stake in Big River in October 2019 with an option to acquire the rest of the company. Higher steel prices in recent months have helped U.S. Steel raise the cash to complete the purchase sooner than expected, a person familiar with the matter said.

More than two-thirds of the steel produced in the U.S. is now made in electric furnaces. Electric furnaces are easier to turn up or down and require fewer workers to operate them. As a result, they are able to operate profitably even when steel prices are low.

But U.S. Steel still mostly makes its steel from iron ore melted in giant blast furnaces fueled by coal. It is a more expensive, labor-intensive process that is difficult to throttle back when demand for steel wanes.

U.S. Steel expects to close on the purchase in early 2021.

In other industry news, Cleveland-Cliffs Inc. has completed its purchase of ArcelorMittal USA.

Completion of the deal means that Cleveland-Cliffs now controls ArcelorMittal USA’s six steel-making facilities, eight finishing facilities, two iron ore mining and pelletizing operations, and three coal and coke-making operations.

In addition to the ArcelorMittal deal, Cleveland-Cliffs also said it had acquired full ownership of two New Carlisle, Indiana steel plants, I/N Tek and I/N Kote. Cleveland-Cliffs previously shared part ownership of the plants with Nippon Steel.

CEO Lourenco Goncalves of Cleveland-Cliffs said the slew of deals “opens a new chapter in the history of the steel business in the United States.”
The company’s new, wider footprint, Goncalves said, would allow Cleveland-Cliffs to be “a major player in supporting American manufacturing, American future investments in infrastructure, and the prosperity of the American people through good paying middle-class jobs.”

Sources: Global News Archive, Industry Week