“Our conviction remains that steel mined, melted, and made in America is vital to our national and economic security,” said U. S. Steel president and chief executive David B. Burritt. “We are strategically investing in our raw materials that will feed the advanced steel mills of today and tomorrow, making us increasingly self-sufficient.”

Under the plan, U. S. Steel will invest US$150 million in either its Keetac or Minntac taconite mines to produce direct reduction (DR)-grade pellets. The company said the pellets could either be sold to outside direct reduced iron producers or be kept for internal use, feeding a direct reduction plant that it perhaps might build in the future.

“DR-grade pellets are a critical feedstock for ironmaking in a direct reduced iron or hot briquetted iron process that ultimately supplies EAF steelmaking. Upon completion, the company would have the option to sell the new pellets to third-party DRI/HBI producers or use them to feed a potential future DRI or HBI facility of its own,” it said.

The intended use notwithstanding, DR-grade pellets are a new product for U. S. Steel, and if all goes according to plan, the company would break ground on the upgrade this fall. However, the investment is contingent on local and state support as well as regulatory permitting.

Also, the steelmaker disclosed that it has a non-binding letter of intent to sell the two Granite City blast furnaces to SunCoke Energy, which would then build a 2-million-ton granulated pig iron plant. SunCoke would be obligated to sell to all of the output to U. S. Steel under a 10-year agreement, the company said.

“U. S. Steel intends to supply the needed iron ore to be used to produce the pig iron. Because the iron ore would come from U. S. Steel’s own mines, the company would realize a significant cost advantage. This pig iron could be used by EAFs and is expected to supply U. S. Steel’s growing fleet of EAFs.”

SunCoke already operates a coke battery at Granite City and would take the lead on repurposing the blast furnaces and building the pig iron plant, if the deal were to go through.

However, U. S. Steel gave no assurances that a definitive agreement would materialize and said the final go-ahead depends on receiving board approval and environmental permits. Construction could take two years.

U. S. Steel already is investing US$60 million to install a pig iron caster at its Gary Works. That facility has the capacity to produce 500,000 tons annually and will supply half of the ore-based based metallics needs for its Big River EAFs.
It is set to come on-line in the first half of 2023.