Steel News

U.S. Steel Cancels Mon Valley Works Investment 

4/30/2021 - United States Steel Corporation is dropping its billion-dollar plan for a new hot strip mill and co-generation plant at its Mon Valley Works in Pennsylvania.  

U. S. Steel on Friday said it canceled the project after re-evaluating its capital allocation strategy in light of its new environmental goals. But it also said delays in the its environmental permitting process contributed to the decision. 

“U. S. Steel is setting aside this project as we step forward to meet the needs of a rapidly changing world. In this world — a world that still needs steel — we need to find aggressive decarbonization solutions.  The project we had planned in 2019 would have decreased our carbon footprint, but we must now move farther and faster,” U. S. Steel president and chief executive David Burritt said in a statement. 

He added:  “Over the past two years we have carried the ball down the field as far as possible without the issuance of the permits necessary to begin construction, which we applied for when we announced the project, 10 months prior to the onset of COVID-19. 

“We commissioned the manufacturing of the equipment and began site preparations. However, with over US$170 million invested and equipment being stored in Pittsburgh-area warehouses, we’re still only at the beginning stages of project execution. By contrast, during this same time period, a competing steel manufacturer in another state announced a new steel mill and will be ready to make steel this year. A lot has changed in those two years.”  

Primarily among those changes is U. S. Steel’s acquisition of Big River Steel, an electric-arc-furnace- based producer with one of the newest steelmaking facilities in North America.  

U. S. Steel executives said they believe Big River has the technological capability to produce the advanced automotive products that might otherwise have been made at an upgraded Mon Valley Works – and with reduced carbon emissions. 

“With a clear vision for our future, we have evaluated how we allocate capital through the lens of sustainability, value creation and lower capital and carbon intensity across the footprint. When facts change, we must change. And as we step forward to meet the needs of a rapidly changing world, we must set aside the Mon Valley (project),” Burritt said. 

The US$1.5 billion project included an endless cast-roll line, a new ladle metallurgy facility and a co-generation plant at its Clairton Coke Works.  U. S. Steel said that with its decision it will now idle Clairton coke batteries Nos. 1-3, lopping about 700,000 tons, or 17%, of its overall annually capacity. 

News of the decision prompted mixed reactions in Pittsburgh. Some said closing the coke batteries would bring environmental benefits to the region, but others said they were angry that a long-term, billion-dollar investment in the region had slipped away. 

Pennsylvania Lt. Gov. John Fetterman, a Democrat and the former mayor of Braddock, Pa., home of Mon Valley’s Edgar Thomson plant, said it was a missed opportunity. 

“We had the opportunity to make some of the greenest steel in the world right here in Braddock and secure the future of thousands of good-paying union jobs,” he said. “But we lost that opportunity today.”

Tom Melcher, business manager for the Pittsburgh Regional Building Trades Council, criticized what he said was a lack of support for, and open hostility to, the project. 

“It’s absolutely unacceptable that any politician or business or community leader who claims to be supportive of union jobs and a strong middle class can allow this project to be lost,” he said. 

The United Steelworkers union also expressed anger at the company, saying it had betrayed the Mon Velley workforce in favor of a “shiny new object,” Big River Steel. 

“These broken promises don’t go unforgotten. Our contract with U.S. Steel requires a minimum amount of capital to be spent in our plants. The USW intends to enforce that,”  said USW International President Tom Conway. 

Nevertheless, U. S. Steel executives stressed that the decision is not the death knell for Mon Valley. 

“This is not the end of the Mon Valley Works,” Burritt said.  

Executives said Mon Valley will continue to have an important role in U. S. Steel operations, producing products for the service center, construction and appliance markets. They said that even before plans were announced for the cast-roll line, Mon Valley was the lowest-cost producer in its flat-rolled fleet and was among its most profitable and most efficient operations. 

Executives said U S. Steel will continue to invest in the facility, and, in fact, had initiated a 25-day blast furnace outage on Friday to begin a small investment there. 

U. S. Steel said it had spent US$170 million on the Mon Valley project so far, with most that being tied up in the cast-roll line’s caster. The equipment is sitting in storage, and U. S. Steel said it has optionality on where that equipment might ultimately be deployed.