Nippon Steel Announces Transformative Investments at U. S. Steel's Mon Valley Works and Gary Works

PRNewswire 28-Aug-2024 5:00 PM

TOKYO, Aug. 28, 2024 /PRNewswire/ -- Nippon Steel Corporation ("Nippon Steel") (TSE: 5401) today announced additional project investments to be made at Mon Valley Works and Gary Works, as part of its pending acquisition ("Transaction") of United States Steel Corporation ("U. S. Steel") (NYSE:X).

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. The investments will require significant expenditures beyond calendar year 2026 and are incremental to the $1.4 billion capital commitment previously announced by Nippon Steel, which will be allocated towards maintenance and other necessary capital investments in the existing BLA-covered facilities.

The details of the announced investments are as follows:

• Mon Valley Works – Replace and/or Upgrade the Existing Hot Strip Mill and Other Facilities at Mon Valley: 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. Nippon Steel plans to ensure Mon Valley Works operates for decades to come and will undertake the necessary investments so that it remains viable and provides jobs for future generations of steelworkers in Pennsylvania. As part of that commitment and following the closing of the Transaction, Nippon Steel will replace and/or upgrade the existing hot strip mill at Mon Valley Works and other facilities. Nippon Steel believes that a transformed Mon Valley Works will expand U. S. Steel's ability to serve a broader 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.
  
  
• Gary Works – Revamping of Blast Furnace #14: Under Nippon Steel's ownership, U. S. Steel's blast furnace operations will benefit. As part of that, Nippon Steel will invest approximately $300 million to revamp Blast Furnace #14 at Gary Works. Through the revamping, the facility's operational life is expected to extend by up to 20 years. Revamping Blast Furnace #14 will also 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 as well as from Nippon Steel's world-leading capabilities for automotive flat steel.
  
  
• Other USW-Represented Facilities: Nippon Steel continues to see numerous opportunities for technology transfer to U. S. Steel following the closing of the transaction to reduce the environmental footprint and extend the longevity of the USW-represented facilities.
  
  As a result of the Transaction, U. S. Steel and all of its facilities will directly benefit from Nippon Steel's significant R&D efforts (~$500M annual spend), its global expertise, world-leading blast furnace know-how, and strong financial position. This includes sharing Nippon Steel's COURSE50 technology (currently proven to reduce carbon emissions by 33% in a test blast furnace) and progress on carbon capture and storage technologies, among other environmental benefits with U. S. Steel.

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, fueled by American workers, while also securing American steel supply for the future. 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."

Nippon Steel is a proven global leader in constructing, operating, and improving best-in-class blast furnaces. The Company's eleven blast furnace facilities are widely recognized for advanced technologies that produce some of the highest quality steel in the world, while driving production and cost efficiency and minimizing carbon emissions. To leverage Nippon Steel's 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 today by Nippon Steel.

The project investments are subject to the closing of the Transaction and receipt of any necessary regulatory approvals. Detailed design and specification of those investments will be determined through further engineering studies.

Nippon Steel expects the transaction to close in the second half of 2024, subject to the fulfillment of the remaining customary closing conditions, including receipt of required U.S. regulatory approvals.

For inquiries, https://www.nipponsteel.com/en/contact/

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SOURCE Nippon Steel Corporation