Nippon Steel commits to blast furnaces if it acquires US Steel

Tokyo-based Nippon Steel Corp. (NSC), which is attempting to acquire United States Steel Corp., intends to invest $1.3 billion to protect and increase production volumes at two blast furnace/basic oxygen furnace (BOF) mills operated by U.S. Steel.

Although Pittsburgh-based U.S. Steel also operates higher recycled-content electric arc furnace capacity at the Big River complex in Arkansas, that facility is not mentioned in the NSC investment announcement.

Instead, the planned investments involve replacing or upgrading an existing hot strip mill and other facilities at the U.S. Steel blast furnace/BOF Mon Valley complex near Pittsburgh.

The other focus of the planned postacquisition investment program involves “revamping" Blast Furnace No. 14 at the U.S. Steel Gary Works in Indiana.

“The investments announced today are major growth investments and represent additional capital spending that will extend the production life of two of U. S. Steel's critical integrated assets and enhance the security of steel supply to American manufacturers,” NSC says.

The company says the newly announced capital project investments are incremental to the $1.4 billion capital commitment previously announced by Nippon Steel, which will be allocated toward maintenance and other necessary capital investments.

A perceived Nippon Steel emphasis on iron- and coal-fed blast furnace production overseas and in the U.S. if it acquires U.S. Steel has gained the attention of some nonprofit groups concerned about carbon emissions.

In April, a coalition of such groups, including the Sierra Club, released a collection of statements referring to what it sees as high-CO₂ emissions production at current U.S. Steel and NSC steel mills.

“Nippon Steel lacks a concrete plan to clean up its steel supply chain and is actually expanding its use of dirty coal,” said Matt Groch of Washington-based Mighty Earth at that time. “This goes against moves by U.S. industries to decarbonize. We urge U.S. regulators not to give the green light to Nippon to buy U.S. Steel as it poses a significant threat to people and the planet.”

In the new NSC announcement, company Representative Director and Vice Chairman Takahiro Mori says environmental benefits will be attached to the new projects.

“The investments announced today will help make U. S. Steel's blast furnace facilities more productive and environmentally sustainable as we seek to provide the highest quality American-made steel products to American customers, fueled by American workers, while also securing American steel supply for the future,” he says.

The announced project investments are subject to the closing of the transaction and receipt of remaining regulatory approvals. NSC expects the transaction to close before the end of the year, subject to the fulfillment of the remaining customary closing conditions, including receipt of required U.S. regulatory approvals.