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U. S. Steel Keeps Electric Furnace Plans on the Burner, Hopes to Soon Finalize Stelco Sale
11/02/2016 - An electric arc furnace remains in the cards for United States Steel Corp. -- it’s only a matter of finding the right time and place to make the investment, the company’s chief executive said Wednesday.
“The concept has not changed,” Mario Longhi said, referring to U.S. Steel’s deferred plans to install an electric arc furnace at its Fairfield Works in Alabama.
“We continue to evaluate where is it that the best investment can be made, and we will certainly continue to pursue the opportunity to acquire more flexibility, which the EAFs will certainly give us. So we don't have … a final decision yet, but I guarantee you that the analysis is continuing,” Longhi said during a conference call to discuss his company’s third-quarter earnings.
On another front, Longhi said U. S. Steel would like to finalize the sale of U. S. Steel Canada and see it emerge from creditor protection as a standalone entity by year’s end.
“We think the momentum on the transaction is moving well. So hopefully, we'll get to a resolution sooner,” Longhi said.
U. S. has taken a step toward that end, announcing on Tuesday that is has agreed on terms of a sale to private investment firm Bedrock Industries. Under the proposed deal, which requires court approval, U. S. Steel would sell the business for about US$126 million and be released of any environmental or pension claims.
U. S. Steel, would, however, continue to provide certain shared services through the transition and would sign a long-term pellet supply agreement with U. S. Steel Canada. Assuming that USSC’s Lake Erie facility was running at full capacity, it could require nearly 3 million tons of pellets annually, a company official told analysts.
The Ontario provincial government has already endorsed the deal with Bedrock Industries, as has USSC’s chief restructuring officer, who said the agreement is a “key milestone” and one that increases the potential for the business to emerge as a viable operation, according to the CBC, Canada’s public broadcaster.
The CBC has more coverage on the deal here.
“We continue to evaluate where is it that the best investment can be made, and we will certainly continue to pursue the opportunity to acquire more flexibility, which the EAFs will certainly give us. So we don't have … a final decision yet, but I guarantee you that the analysis is continuing,” Longhi said during a conference call to discuss his company’s third-quarter earnings.
On another front, Longhi said U. S. Steel would like to finalize the sale of U. S. Steel Canada and see it emerge from creditor protection as a standalone entity by year’s end.
“We think the momentum on the transaction is moving well. So hopefully, we'll get to a resolution sooner,” Longhi said.
U. S. has taken a step toward that end, announcing on Tuesday that is has agreed on terms of a sale to private investment firm Bedrock Industries. Under the proposed deal, which requires court approval, U. S. Steel would sell the business for about US$126 million and be released of any environmental or pension claims.
U. S. Steel, would, however, continue to provide certain shared services through the transition and would sign a long-term pellet supply agreement with U. S. Steel Canada. Assuming that USSC’s Lake Erie facility was running at full capacity, it could require nearly 3 million tons of pellets annually, a company official told analysts.
The Ontario provincial government has already endorsed the deal with Bedrock Industries, as has USSC’s chief restructuring officer, who said the agreement is a “key milestone” and one that increases the potential for the business to emerge as a viable operation, according to the CBC, Canada’s public broadcaster.
The CBC has more coverage on the deal here.
