U.S. Steel to delay construction at Mon Valley Works
U.S. Steel is delaying construction for its $1 billion project at the Mon Valley Works, part of an effort to secure the Pittsburgh steelmaker’s future as COVID-19 disrupts oil and gas markets around the world.
The long-term plan, which the company announced Friday, calls for the delay of projects like the Mon Valley Works, a reduction in capital spending and the idling of some operations.
Already, U.S. Steel expects the financial and operational impacts of the coronavirus pandemic will lead to a meaningful reduction in demand for the full fiscal year.
The aggressive actions outlined Friday are meant to reposition the company to “weather the current situation,” President and CEO David Burritt said in a statement. “The short-term actions announced today are difficult but necessary,” he said.
In Pittsburgh, U.S. Steel has delayed construction at its Mon Valley facilities for an indeterminate amount of time “until market conditions become more certain,” Mr. Burritt added.
The Mon Valley facilities include Edgar Thomson Works in Braddock, Clairton Coke Works and the Irvin plant in West Mifflin. The complex employs about 3,000 people.
The latest project, which was originally set to break ground in September, included an endless casting and rolling line and a cogeneration facility that were meant to increase the site’s efficiency and sustainability and reduce emissions.
Along with the Allegheny County Health Department, U.S. Steel decided to temporarily pause the permitting process for new construction because efforts to prevent the spread of COVID-19 would have made the public comment process difficult.
The casting and rolling mill was set to start in the fourth quarter of 2022, and the cogeneration plant was scheduled to be running at full capacity by mid-2023.
U.S. Steel plans to spend about $85 million on the Mon Valley Works in 2020 and said it will continue to assess the timeline and remaining budget.
Around the country, the
Pittsburgh steelmaker is also planning to idle some operations in response to changing market demands and a significant drop in oil prices, according to the press release.
Beginning in late May, U.S. Steel will idle all or most of Lone Star Tubular Operations in Texas and Lorain Tubular Operations in Ohio for an indefinite period of time.
The company will immediately idle a blast furnace at Gary Works in Indiana, part of a planned outage that was set to begin in April and will now last until market conditions improve, and a furnace at Granite City Works in Illinois. Most employees will be reassigned within the plants, according to spokesperson Meghan Cox.
“There is no immediate planned impact on employment levels as a result of today’s announcement,” Ms. Cox said in a statement. “All operational decisions, including restarting one or both blast furnaces and potential future layoffs, will be guided by market conditions.”
U.S. Steel plans to continue the idling of much of its Great Lakes Works in Michigan, a move that previously led the company to issue layoff notices to about 1,500 workers.
“The company will continue to monitor the impacts of the coronavirus on its orderbook and will regularly assess the footprint required to support its customers’ needs,” the news release read.