Cleveland-Cliffs to buy ArcelorMittal integrated mills in US

Luxembourg-based ArcelorMittal says it has entered into a definitive agreement with Cleveland-based Cleveland-Cliffs Inc. for that firm to acquire “100 percent of the shares of ArcelorMittal USA for a combination of cash and stock.”

The assets being sold do not include ArcelorMittal mills in Canada or Mexico or the electric arc furnace (EAF) mill being constructed in Alabama. It does include large basic oxygen furnace (BOF) integrated mills in Cleveland and in Burns Harbor and East Chicago, Indiana, and a small BOF complex in Riverdale, Illinois. Cleveland-Cliffs also will acquire EAF facilities in the Pennsylvania cities of Coatesville and Steelton.

Cleveland-Cliffs, which has its roots in supplying iron ore and other steelmaking ingredients, leapt into the steelmaking sector earlier this year with the purchase of AK Steel.

© Viktor Macha

In addition to the melting capacity being acquired from ArcelorMittal, Cleveland-Cliffs will take possession of metallics production and downstream facilities in Indiana, Minnesota, Ohio, Pennsylvania and West Virginia.

“This transaction is a unique opportunity for ArcelorMittal to unlock significant value for shareholders while retaining exposure to the North American economy through our high-quality assets alongside a participation in what will be a stronger, better integrated United States business,” says ArcelorMittal President and Chief Financial Officer Aditya Mittal.

“Combining these two companies, which have enjoyed a long and strong supplier/customer relationship, is a unique opportunity to create a competitive and resilient company with considerable synergy potential,” he continues. “As a result, this transaction offers compelling value proposition with further upside potential. The transaction also completes our $2 billion asset portfolio optimization target and enables us to return cash to shareholders.”

Under the terms of the agreement, Cleveland-Cliffs will assume ArcelorMittal USA’s liabilities, including approximately $500 million in net liabilities and pensions and other postemployment benefit liabilities that Cleveland-Cliffs values at $1.5 billion, ArcelorMittal says.

ArcelorMittal refers to the newly combined company created by the addition of its former assets with those of AK Steel as being “more diversified, fully integrated and [having] significant synergy potential.”

Lourenco Goncalves, chairman, president and CEO of Cleveland-Cliffs, says, “Steelmaking is a business where production volume, operational diversification, dilution of fixed costs and technical expertise matter above all else, and this transaction achieves all of these. ArcelorMittal is a world-class organization that we have long admired as our customer and our partner, and we know for a fact that they have taken good care of their U.S. assets.

“The acquisition of ArcelorMittal USA amplifies our position in the discerning automotive steel marketplace and further improves our position in important U.S. markets, such as construction, appliances, infrastructure, machinery and equipment. It also adds to our strong legacy raw material profile and growing finishing capabilities,” Goncalves continues. “The transaction will enable us to become a more efficient fully integrated steel system with the ability to realize all of our operational and financial goals.”

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DJJ adds Appalachian yards to its portfolio

The River Metals Recycling (RMR) subsidiary of Cincinnati-based David J. Joseph Co. (DJJ) has announced the acquisition of scrap processing locations in Ashland, Kentucky; Coeburn, Virginia; and Charleston, West Virginia. The recycling plants were acquired from Mississippi-based Columbus Recycling.

The acquired facilities had been operating under the name CRHC Mansbach Metal LLC. Mansbach Metal was formerly part of Alabama-based Progress Rail Corp. The Mansbach locations, which include an auto shredder in Ashland, changed hands in 2017 when Progress Rail sold them to Columbus Recycling. RMR operates 17 locations in Kentucky, Ohio, Tennessee, Indiana, Illinois, Virginia, West Virginia and Alabama, including auto shredders in Ashland, Newport and Louisville, Kentucky.

LME to introduce UBC-related contract

As part of a wider initiative to what it calls a “transition to sustainable economy,” the London Metal Exchange (LME) says it intends to offer a new aluminum scrap contract to serve the North American used beverage can (UBC) sector, and it will add two new regional ferrous scrap contracts.

“By supporting these industries in managing their price risk, the LME will assist in the development of the recycled value chain, enabling it to reach ambitious goals while maintaining robust planning and fair pricing,” according to the LME.

The new contracts are mentioned in what the LME calls “a discussion paper on plans to drive forward its sustainability agenda.” Parts of this paper are tied to what the LME cites as the growing electric vehicle (EV) sector. The exchange had indicated in June that it intended to expand its sustainability-related contracts.

“Metals are vital to our transition to a more sustainable future, and this paper sets out our vision to work collaboratively with industry to maximize the potential of metals to power this transition,” says Matthew Chamberlain, LME chief executive.

“We already provide access to contracts that are essential both to burgeoning industries such as EVs and to infrastructure supporting the circular economy,” he continues. “But we need to do more, both in building out these areas and in supporting the development of the sustainable production of metals. And we are in a strong position as the global nexus of metals pricing and trading to bring the industry together, as with our responsible sourcing initiative, in our collective journey to a greener future.”

Pertaining to EVs, the LME says it already provides pricing and risk management tools for a number of key components of EVs and EV batteries (copper, nickel and cobalt). The anticipated launch of an LME lithium contact will add to those offerings.