United States Steel corporation is becoming part-owner of North America's newest steel mini mill.
The Pittsburgh-based steelmaker on Tuesday announced a $700 million deal under which it is acquiring a 49.9 % percent ownership interest in Big River Steel.
Big River Steel, in Osceola, Ark., is the newest and most technologically advanced scrap recycling and steel production mill North America.
“Our new partnership with Big River is designed to accelerate our strategy to offer our customers the “best of both' by bringing together the capabilities of integrated and mini mill steel production,” said David B. Burritt, U.S. Steel president and chief executive officer. “Big River operates the most advanced, state-of-the-art and sustainable mill in North America, and our investment would ultimately strengthen our competitive positioning in highly strategic steel-end markets, creating an unmatched proposition for our stakeholders.”
Big River Steel produces automotive and electrical steels to customers in the auto, energy, construction and agriculture industries. Recently, Big River Steel announced plans to double its hot-rolled steel production to 3.3 million tons annually.
Big River Steel began production in 2017. It is the world's only LEED-certified steel mill, according a Big River Steel news release.
“Five years ago, we started Big River Steel with five employees with BIG ideas, and today we are partnering with a company started by Andrew Carnegie 118 years ago,” said David Stickler, Big River Steel chief executive officer. “As partners with U.S. Steel, we intend to prove to the world that the best way to make steel is by combing the best of traditional integrated steelmaking with the best of electric arc furnaces mini mill steel making.”
Under the deal, U.S. Steel has an option to acquire the remaining 50.1% of Big River Steel in four years based upon an agreed-upon price formula based on Big River's achievement of certain metrics.
In northeastern Minnesota, U.S. Steel owns and operates Minntac Mine in Mountain Iron and Keetac in Keewatin. Both plants produce iron ore pellets which are fed into U.S. Steel's blast furnaces to make steel. U.S. Steel also holds an ownership stake in Hibbing Taconite.
Mini mills such as Big River Steel use scrap and higher-value iron products such as direct-reduced iron to manufacture steel.