Newsworthy

Metals, Mergers & Acquisitions

Cleveland-Cliffs, Esmark make bids for US Steel

Cleveland-Cliffs Inc. has announced its intent to make a bid to acquire United States Steel Corp., Pittsburgh. If the merger is completed as proposed, it would fully consolidate blast furnace/basic oxygen furnace (BOF) steel-making capacity in the U.S.

“On July 28, I approached U.S. Steel’s CEO and board with a written proposal to acquire U.S. Steel for a substantial premium, valuing the company at $35.00 per share with 50 percent cash and 50 percent stock,” Cleveland-Cliffs President and CEO Lourenco Goncalves said in an announcement Aug. 13.

U.S. Steel initially rejected the offer, and a letter posted by company president and CEO David Burritt to its website Aug. 13 the U.S. Steel board of directors are unhappy with how the proposal has been managed by Cleveland-Cliffs.

“We discussed with your counsel questions that would need to be better understood in order for both of us to appropriately assess the antitrust risk of your proposal; and while your counsel agreed that this would need to be analyzed and was amenable to our proposal to work on this together, this still has not happened,” Burritt says.

“After multiple conversations about, and our team’s engagement in good faith negotiations over, the terms of the nondisclosure agreement (NDA), we were shocked to receive a letter on Friday, Aug. 11, stating that you refused to sign the nearly completed NDA unless we agree to the economic terms of your proposal in advance.

“Our board—or any board—could not, consistent with its fiduciary duties, agree to a proposal of which 50 percent is represented by your stock without conducting a thorough and completely customary due diligence process, to evaluate the risks and potential upsides and downsides inherent in the transaction, including the stock component.”

Hours after posting rejecting the bid, U.S. Steel made two more weekend announcements: one concerns the start of a “strategic alternatives process” while the second indicates Cleveland-Cliffs has been invited to be part of that process.

In the Aug. 13 announcement, Cleveland-Cliffs and Goncalves say they have the backing of the United Steelworkers (USW) union for the proposal.

As Burritt indicates in his letter, a proposed merger would almost certainly face regulatory scrutiny, as it combines the assets of the remaining two integrated (from mined iron to BOF output) steel producers left in the U.S. The two companies also operate some scrap-fed electric arc furnace (EAF) steelmaking capacity, including U.S. Steel’s Big River Steel campus in Osceola, Arkansas.

In terms of blast furnace/BOF capacity, U.S. Steel operates sites in Granite City, Illinois; Gary, Indiana; and Braddock, Pennsylvania. Cleveland-Cliffs now owns mills formerly operated by AK Steel and Luxembourg-based ArcelorMittal, with complexes in Riverdale, Illinois; Burns Harbor and East Chicago, Indiana; Dearborn, Michigan; and Cleveland and Middletown, Ohio.

There currently are three operational blast furnace/BOF campuses in Canada, although two of them—operated by ArcelorMittal and Algoma Steel—are in the process of converting to EAF technology. That would leave Hamilton, Ontario-based Stelco Inc. as the only non-Cleveland-Cliffs BOF mill operating in the U.S. and Canada if the merger occurs.

Regarding the terms of the offer, Cleveland-Cliffs has proposed acquiring 100 percent of the outstanding stock of U.S. Steel for a per-share value of $17.50 in cash and 1.023 shares of Cliffs stock. As of the close of market Aug. 11, this offer represents a 43 percent premium to U.S. Steel’s share price.

Cleveland-Cliffs says the proposed transaction has the unanimous approval of Cliffs’ board of directors and is not subject to any financing condition.

A day later, Sewickley, Pennsylvania-based flat-rolled steel service center Esmark Inc. announced a voluntary public cash and exchange offer for all issued and outstanding shares of U.S. Steel.

Esmark’s initial offer period runs from Aug. 14 to Nov. 30 but could be extended. Esmark Steel Group is a processor and distributor of value-added flat-rolled steel, describing itself as the third-largest U.S. producer of tinplate steel.

“With more than 40 years of steel industry experience, and as a former executive and statutory representative of U.S. Steel, I have significant intimacy with the steel business in the U.S. and around the globe,” Esmark CEO James P. Bouchard says.

Bouchard also points to his experience as an executive committee member of the American Iron and Steel Institute (AISI) and the European Steel Association (Eurofer). His current titles are as forever chairman and CEO of Esmark/Wheeling Pittsburgh Steel.

Prior to founding Esmark in 2003, Bouchard was an executive with U.S. Steel in Europe as a member of the executive team that U.S. Steel dispatched to Kosice, Slovakia, after having acquired the Slovakian National Steel Company (VSZ).

Metals

Radius Recycling is Schnitzer's new name

Portland, Oregon-based Schnitzer Steel Industries Inc. has changed its name to Radius Recycling, setting aside the family name of Sam Schnitzer, who founded the metals recycling firm in 1906.

The company, which operates a network of scrap recycling and auto salvage facilities as well as one scrap-fed electric arc furnace (EAF) steel mill, says the rebranding has been designed to reflect its vision, purpose and impact on the global circular economy.

“While metals recycling and steel manufacturing have been the foundation of our global business for many decades, our company’s reach now extends far beyond what the name Schnitzer Steel implies,” CEO Tamara Lundgren says of the newly named firm.

“Our growth has been marked by expansion in both scope and scale, and we now operate in over 100 communities across North America. Radius Recycling is a name that represents our 3,500 employees, thousands of stakeholders and a future in which recycled metals sit at the center of progress, seamlessly connecting all points within the circular economy.”

The recycling and steelmaking firm will change its NASDAQ ticker symbol to RDUS (from the current SCHN) this month at the start of its next fiscal year.

The company says it will “further its commitment to advance the recovery, reuse and recycling of the essential metals required to support global carbon reduction.”

Under its previous name, Radius says it developed robust networks to collect, process and deliver recycled metals to customers around the world. Those operations include several auto shredding plants and seven deep-water export facilities on both the East and West coasts and in Hawaii and Puerto Rico.

As currently configured, the firm delivers recycled metals to domestic and international customers and produces low-carbon emissions finished steel products. Radius also operates the 3PR Third Party Recycling service, which it says increases recycling rates and supports the sustainability efforts of American retailers and manufacturers.

Recent accolades for the newly named firm include being listed as one of Time’s 100 Most Influential Companies of 2023, being recognized as the Most Sustainable Company in the World by Toronto-based Corporate Knights in 2023 and being honored by Arizona-based Ethisphere as one of the World’s Most Ethical Companies for nine consecutive years.

Radius Recycling operates scrap recycling facilities in 25 states, western Canada and Puerto Rico, and 50 auto salvage/retail auto parts stores and its EAF steel mill in Portland.

Plastics

Republic Services, Ravago partner to build recycled plastic production network

Republic Services, one of North America’s largest waste and recycling companies, has partnered with Luxembourg-based polymer recycling and distribution company Ravago with the aim of advancing circularity in the plastics industry.

Through their partnership, Blue Polymers LLC, the companies are developing a network of facilities to produce 100 percent postconsumer recycled (PCR) resin to supply plastic manufacturers’ growing demand for sustainable solutions.

Phoenix-based Republic last year announced plans to construct four polymer centers across the U.S., with the first on track to open in Las Vegas this year. These sortation plants each will have a dedicated polyethylene terephthalate (PET) line and another for high-density polyethylene (HDPE) and polypropylene (PP), processing plastics collected from Republic’s surrounding residential and commercial customers.

The new Blue Polymers network will be co-located with the Republic Polymer Centers, taking in recycled polyethylene (PE) and PP from those sites to create PCR resin for consumer packaging and other applications, converting HDPE and PP into fully formulated products for use in food- and nonfood-grade applications. Blue Polymers’ product offerings also will include custom-blended and compounded materials for individual customers to help achieve sustainability goals and comply with federal, state or local requirements for recycled content, the companies say.

The companies say four Blue Polymers centers are planned to open over the next four years, beginning in late 2024, and are expected to produce up to 300 million pounds of recycled plastics annually. Additionally, a portion of recycled PET, or rPET, from Republic Polymer Centers will be marketed and distributed by Ravago through its customer network.

In early July, Republic Vice President of Recycling and Sustainability Pete Keller announced the Polymer Centers will supply rPET flake to The Coca-Cola Co., which aims to use at least 50 percent recycled content in its packaging by 2030.

Republic processed 5 million tons of recyclables last year, more than 300 million pounds of which were plastic, and with Ravago’s expertise in distribution, resale, compounding and recycling, the companies say they are positioned to help fulfill sustainable packaging demand and efficiently deliver to customers at scale.

Ravago has 45 manufacturing facilities worldwide, 19 of which are recycling and compounding plants.

Paper

WestRock continues consolidation with planned closure of Tacoma paper mill

WestRock Co. is moving forward with its footprint optimization strategy with the announcement of its second facility closure in as many weeks.

The Atlanta-based paper and packaging producer will permanently cease operations at its paper mill in Tacoma, Washington, and will conclude production by the end of September following several moves to consolidate production over the first half of this year.

The company cites a combination of high operating costs and the need for significant capital investment as determining factors in the decision to shut the Tacoma site, which impacts approximately 400 employees.

“WestRock is working to optimize our operational footprint and consolidate production in order to improve our return on invested capital and we have made the difficult decision to close the Tacoma mill as part of this effort,” CEO David B. Sewell says, adding that the company will assist Tacoma employees with exploring roles at other WestRock locations and nearby companies, as well as providing outplacement assistance.

The mill produces kraft and white top liner and bleached pulp with a combined annual capacity of 510,000 tons. WestRock says the majority of kraft and white top liner will be transitioned to other mills in its system while approximately 600,000 annual tons of pulp and 25,000 annual tons of specialty-grade capacity will be eliminated.

According to a permit filed with the U.S. Environmental Protection Agency’s National Pollutant Discharge Elimination System, the 60-acre mill consumes mostly virgin wood fiber as well as old corrugated containers (OCC). The permit dated April 2021 indicates the site consumes about 650 tons of OCC per day—around 237,000 tons annually.

The company also filed a Worker Adjustment and Retraining Notification, or WARN, notice last month indicating its plans to close a St. Louis corrugated container manufacturing facility by mid-September, affecting 52 employees. The plant was expected to cease production by mid-August and transfer production to other WestRock facilities.

Last year, WestRock permanently closed a mill in Panama City, Florida, and ceased corrugated medium manufacturing operations at its recycled paper mill in St. Paul, Minnesota, with the shutdown in St. Paul resulting in the elimination of 200,000 tons of annual corrugated medium production.

This May, the company announced the planned closure of its North Charleston, South Carolina, mill, as well as its corrugated container plant in Anne Arundel County, Maryland, impacting a combined 575 employees.

Batteries

Cirba Solutions expands lithium-ion battery processing operations in Ohio

Charlotte, North Carolina-based battery materials and management company Cirba Solutions has expanded its lithium-ion processing operations in Lancaster, Ohio. The Department of Energy (DOE) awarded $82 million in grants, the first of which in October 2022 and the second in November, to aid in the approximately $200 million expansion, which is slated to support the circular battery supply chain, furthering the advancement of cost-effective lithium-ion battery processing and critical materials supply, the company says.

Cirba Solutions first announced its expansion plans in Lancaster in October of last year.

Cirba received funding under the DOE’s Office of Manufacturing and Energy Supply Chains (MESC) grant program as part of the federal Bipartisan Infrastructure Law. This funding highlights the first phase of more than $7 billion in total funding provided through the new bill, earmarked specifically for the battery supply chain to expand domestic manufacturing of batteries for electric vehicles (EVs) and the electrical grid, the company says.

As part of the expansion, Cirba will utilize a hydrometallurgical process to produce battery-grade metal salts from end-of-life lithium-ion batteries and gigafactory scrap, extracting critical metals, such as lithium, nickel, cobalt and manganese, from batteries to supply domestic precursor and cathode active materials manufacturers.

“With Lancaster’s long history of manufacturing and recycling expertise, the expansion of this Cirba Solutions facility will be a tremendous support to the sustainable battery supply chain centered right here in America,” Secretary of Energy Jennifer Granholm says. “The investment in this expansion, including funding awarded from the president’s Investing in America Agenda, will support this facility in extracting enough battery-grade critical minerals to power 200,000 new electric vehicles per year and will create 150 good-paying jobs that will be in demand for decades to come.”

“This investment is crucial to the lithium-ion battery industry as demand for battery materials continues to increase,” says David Klanecky, Cirba’s president and CEO. “With the assistance of the DOE, Cirba Solutions can make even greater strides in our battery recycling efforts to complete a closed-loop supply chain in North America.”