Steel Mills

USS Begins Metallics Expansion Amid Contentious USW Talks

Written by David Schollaert

US Steel Corp. began construction on its $150 million direct-reduced-grade iron pellet plant in Keewatin, Minn., on Thursday, Oct. 5.

Minnesota Governor Tim Walz joined US Steel’s President and CEO David Burritt, and other leadership members to celebrate the company’s project and tout its “commitment to produce products that are mined, melted and made in America,” the company said in a release.

US Steel

“Our investment at Keetac is a commitment to the future of American steel,” said Burritt. “I want to recognize the exceptional team working on this project and our employees for their dedication.”

“When we do well, so do our employees and the communities where we live and work; the Iron Range remains a critical part of our future,” he added.

The venture marks a step forward in the Pittsburgh-based steelmaker’s metallics strategy to expand its electric-arc furnace (EAF) feedstock capability. It provides US Steel with the “flexibility to feed a potential future direct reduced iron (DRI) or hot briquetted iron (HBI) facility.”

DR-grade pellets are the feedstock necessary to make DRI and HBI. The primary consumer of DRI and HBI are EAF sheet mills. But US Steel has said it would retain the option to make both blast furnace and DR-grade pellets. It can sell DRI and HBI not only to its mills but also to third parties.

US Steel broke ground on the facility in Q3. It’s expected to be operational in late 2023 with pellet production set for 2024.

“I’m proud to celebrate US Steel’s major investment in the Northland,” said Governor Walz. “Minnesota’s steel industry is a critical part of our history, culture, and thriving economy – and a critical job creator on the Iron Range.”

The event’s fanfare may have been overshadowed though by United Steelworkers (USW) union members – from the company’s Minntac and Keetac iron ore mines and pellet plants in Mountain Iron, Minn., and Keewatin, Minn. – who showed up in force to picket and rally for a “fair” new labor pact.

The Pittsburgh-based steelmaker has been in tense contract negotiations with the USW since master bargaining began in mid-July. They enter their fourth month of bargaining. Negotiations are now a month past the original Sept. 1 expiration.

The union was invited to participate in Wednesday’s event but chose not to, John Arbogast, USW District 11 staff representative told Duluth News Tribune. Instead they gathered outside Local 2660’s union hall in downtown Keewatin and along the road to Keetac.

USWKeetac Photo

Arbogast added that it was unfortunate that the steelmaker planned the celebration while a “contract war” rages on. “I would love to be there. We all would,” he told the local paper. “This is very exciting news for the Iron Range… this is huge.”

“USS CEO David Burritt traveled to Keetac to tout the company’s planned investments at the mine,” USW said in a text sent to members on Oct. 5. “When he got there, he was confronted with such strong union turnout that he changed his route, but still couldn’t avoid us!”

The union added that they “believe in these investments” at Keetac but also in a “fair contract to truly secure our futures. It’s time for a Fair Deal, Burritt!”

Roughly 13,000 USW members at 13 of US Steel’s locations have been working under an agreement that has been extended since Sept. 1, subject to a 48-hour notice for either party to terminate.

Iron Range (Cleveland-Cliffs) Steelworkers – who already ratified their new contract with USW – will rally and march in solidarity for a fair contract at US Steel on Saturday, Oct. 8, the union said in an email to its members. USW steelmaking members are expected to vote on their tentative contract with Cliffs next week.

“The USW has already reached agreements with Cleveland-Cliffs covering workers at the company’s steelmaking and mining operations, but negotiations with US Steel have dragged past expiration, with management seeking unnecessary concessions and offering substandard wage increases,” an email said.

Last week, the USW rejected US Steel’s latest proposal, highlighting Cliffs’ contract as the standard for US Steel to follow.

According to the Duluth News Tribune, Arbogast said the union is pushing for what’s in the Cliffs contract: a 20% raise over the contract’s four-year term and $4 billion in investments in USW-represented facilities during the contract.

“We are so far apart from where Cliffs is, with our pattern that’s been established… we’re not even close, we’re miles apart on wages, pensions, healthcare, holidays… we got to get what Cliffs got,” Arbogast told the paper.

The timing of the contract impasse is unique in that the extension period is now bleeding into the thick of steel supply contract negotiation season between steelmakers and customers.

A good chunk of the market doesn’t seem concerned, but another portion of the market is closely watching how it all shakes out. Securing volumes could be troublesome if a lockout or strike ensues.

By David Schollaert,

David Schollaert

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