U.S. Steel Corp. is considering locations in Arkansas and Alabama for a new $3 billion steel mill, the company said Friday.
The so-called mini-mill will combine two electric arc furnaces, which primarily use steel scrap and are far more energy-efficient than traditional integrated plants that are fed by coal. The company expects to begin construction in the first half of 2022 and start producing in 2024.
The steel giant's board has authorized an exploratory site selection process for the location of the mini-mill, according to the statement. Potential locations include Alabama and Arkansas, where U.S. Steel has existing EAF operations as well as greenfield sites.
U.S. Steel Corp. Chief Executive Officer David Burritt told The Wall Street Journal that the site hasn't been selected but that Arkansas and Alabama are being considered.
U.S. Steel is the relatively new owner of Big River Steel, which, in 2013, helped sustain and grow the steel industry in Arkansas and, more specifically, in Mississippi County when it built a $1.3 billion "flex mill" near Osceola that employs more than 500. About 15 months later, it announced plans for a $1.2 billion expansion.
"We welcome the opportunity to compete for business expansion projects statewide that will lead to more high-paying jobs for Arkansans," Chelsea O'Kelley, a spokeswoman for the Arkansas Economic Development Commission, said Friday. "However, per agency protocol, we do not comment on specific projects."
Clif Chitwood, director of the Mississippi County Economic Development Commission, said, "Like my friends at the AEDC always say, we can neither confirm nor deny. Mississippi County has proven to be a hospitable and profitable place for steel production for two decades and we want to continue doing that."
About 3,000 people in the county are directly employed by steel producers such as Nucor Corp., which began its Mississippi County operations in 1988, and U.S. Steel. At least 1,200 more are employed by other steel-related businesses and suppliers.
Chitwood estimated that 40% of the workers directly employed by the mills are residents of Mississippi County. "Almost 100% of the jobs that supply the mills and jobs with all the steel-affiliated companies and businesses are held by residents here," Chitwood said.
U.S. Steel's announcement comes as domestic futures prices for steel have more than tripled in the past year. The plan to build a new mill is the latest sign that steelmakers are growing more comfortable that higher prices will persist.
While the production increase has produced a windfall for domestic suppliers, it's driving up the cost of everything from automobiles to wind turbines to kitchen appliances as the world recovers from the pandemic.
The company also estimated that it would report record earnings for the third quarter on the back of the strong prices, which will allow it to reduce debt.
The benefits of higher prices are being felt across the industry. Earlier Thursday, Nucor Inc., the largest U.S. steelmaker, said it expects record earnings through the end of the year, and Steel Dynamics Inc. on Wednesday forecast fourth-quarter earnings to be stronger than its previous guidance.
U.S. Steel characterized the planned mill, expected to produce 3 million tons of flat-rolled steel products, as part of the efforts to achieve its 2030 goal of reducing greenhouse gas emissions intensity by 20%, according to the statement.
Information for this article was contributed by Stephen Steed of the Arkansas Democrat-Gazette and by Yvonne Yue Li and David Marino of Bloomberg News.