SEATTLE (Scrap Monster): Pittsburgh-based United States Steel Corporation (U.S. Steel) announced that it has signed a non-binding letter of intent with Suncoke Energy, Inc. towards supply of iron ore to produce pig iron.
In accordance with the agreement between the two companies, SunCoke would acquire the two blast furnaces at Granite City Works and build a 2 million ton granulated pig iron production facility. Upon completion of the proposed facility, the steelmaker will have access to 100% of the pig iron production for the next ten years.
U.S. Steel intends to ensure adequate supply of iron ore needed for pig iron production. The iron ore would be supplied from U.S. Steel’s own mines, thus helping the company to realize significant cost benefits.
The transaction is subject to several conditions, including negotiation and execution of a definitive agreement and receipt of all appropriate regulatory approvals. It also needs the approval by the U. S. Steel Board of Directors. There is no assurance that these conditions will be met and the transaction would be completed, said the company press release.
The construction of the new facility and the repurposing of the blast furnaces will be led by Suncoke. The permitting and construction period is estimated at around two years.