Japanese company Nippon Steel is looking to invest $1.3bn (Y187.87bn) at U.S. Steel’s Mon Valley Works and Gary Works facilities in the US.
These investments, part of Nippon Steel’s acquisition of U.S. Steel, aim to extend the production life of key integrated assets and secure steel supply for US manufacturers.
In December 2023, Nippon Steel reached an agreement to acquire US Steel in an all-cash deal valued at $14.9bn including debt.
Nippon Steel will invest more than $1bn in Mon Valley Works, boosting competitiveness through enhanced yield, energy efficiency and product quality.
The investment aims to ensure the facility’s longevity and job security for steelworkers in Pennsylvania, and includes replacing or upgrading the hot strip mill and other facilities, post-acquisition.
Additionally, the Japanese steelmaker will revamp Gary Works’ Blast Furnace #14 with an investment of around $300m.
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Your download email will arrive shortly
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalData
This will extend the furnace’s operational life by up to 20 years, offering operational and environmental benefits.
Nippon Steel also plans to transfer technology to U.S. Steel’s facilities, aiming to reduce environmental impact and enhance longevity, upon completion of the deal.
Furthermore, Nippon Steel has signed an agreement to evaluate and assist with the maintenance and operations of U.S. Steel’s blast furnaces.
The investments are contingent on the completion of the acquisition and necessary regulatory approvals.
Nippon Steel representative director and vice-chairman Takahiro Mori said: “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.
“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, fuelled by American workers, while also securing American steel supply for the future.”
The merger has received all regulatory clearances outside of the US.
However, the steelmaking companies are facing regulatory scrutiny within the US, and criticism from the United Steelworkers union, which is concerned that the deal may result in lay-offs, reported Reuters.
Nippon Steel expects the deal to be completed in the second half of 2024.
