Japan’s largest steel producing company, Nippon Steel Corp., plans to make additional investments in two steel plants operated by U.S. Steel as part of its pending acquisition of the Pittsburgh-based steel producer.
“From the outset, we have been clear in our admiration for the entire U. S. Steel portfolio and our desire to provide investment and technical expertise to protect and grow U. S. Steel as one of the world’s best steelmakers with world-leading capabilities,” Nippon Steel Representative Director and Vice Chairman Takahiro Mori said Wednesday.
Pending regulatory and shareholder approval, U.S. Steel is set to be acquired by Nippon Steel for $14.1 billion (USD). The deal, announced in mid-December 2023, retains U.S. Steel’s name and headquarters in Pittsburgh.
The investments announced Aug. 28 are major growth investments and represent additional capital spending that will extend the production life of the Mon Valley Works–Irvin Plant, a steel processing plant in West Mifflin, Pa., and Gary Works, a major steel mill in Gary, Ind., that remains the largest integrated mill in North America. Both are operated by U.S. Steel.
Mori said that the investments will require significant expenditures beyond calendar year 2026 and are incremental to the $1.4 billion capital commitment Nippon Steel previously announced.
According to the company’s statement, Nippon Steel will invest no less than $1 billion to enhance the competitiveness of the Mon Valley Works, including improving yield, increasing energy efficiency, improving product quality, and enhancing overall operating effectiveness.
Specifically, Nippon Steel plans to replace and/or upgrade the existing hot strip mill at Mon Valley Works and other facilities, saying that once transformed, the steel mill will expand U.S. Steel’s ability to serve a larger range of markets and customers, create additional high-grade steel capabilities, strengthen the competitive positioning of Mon Valley’s blast furnace operations, and secure American steel supply.
Pending Nippon Steel’s ownership deal, the company also will invest approximately $300 million to revamp Blast Furnace #14 at Gary Works, extending the facility’s operational life by up to 20 years, the Tokyo-based company said.
Revamping the blast furnace also will allow U.S. Steel to realize significant operational benefits, while customers will benefit from the continuation of environmentally friendly blast furnace production at Gary Works.
“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,” Mori said.
Also following the closing of the transaction, Nippon Steel said numerous other opportunities exist for technology transfer to U.S. Steel that will reduce the environmental footprint and extend the longevity of the USW-represented facilities.
For instance, U.S. Steel and all of its facilities will directly benefit from Nippon Steel’s R&D efforts, its global expertise, leading blast furnace know-how, and strong financial position, including sharing Nippon Steel’s COURSE50 technology, which is currently proven to reduce carbon emissions by 33 percent in a test blast furnace.
To leverage its expertise, Nippon Steel recently signed an agreement with U.S. Steel to conduct an evaluation and provide technical assistance for the long-term maintenance and operations of U.S. Steel’s blast furnaces. That analysis will further inform the project investments announced this week by Nippon Steel.
“We are excited to build upon the strong steelmaking legacy in the Mon Valley and Gary for the benefit of all stakeholders and the American steel industry for generations to come,” said Mori.
The project investments are subject to the closing of the transaction and receipt of any necessary regulatory approvals, and Nippon Steel expects the deal to close in this year’s second half.