U.S. Steel Explosion Presents Challenge to Nippon’s Investment Plans
Crews work to restore operations after deaths of two employees
- A deadly explosion at U.S. Steel’s Clairton plant is testing the resolve of Nippon Steel.
- The explosion reduced U.S. Steel’s ability to produce coke, a key steelmaking input for its Mon Valley Works complex.
- Nippon Steel pledged $2.2 billion for upgrades at Mon Valley by 2028, though the to-do list didn’t include repairs to Clairton’s coke ovens.
Nippon Steel 5401 -0.60%decrease; red down pointing triangle promised to spend $14 billion to keep U.S. Steel’s aging plants humming for decades. A deadly blast at a mill near Pittsburgh will test the Japanese steelmaker’s resolve through a costly crisis.
Crews are continuing to clean up and restore operations at the Clairton, Pa., plant where an explosion Monday killed two workers and injured 10 others. U.S. Steel officials said the blast reduced the company’s ability to produce coke—a key steelmaking input—at its Mon Valley Works complex.
Jim Borkowski, an employee with 21 years of service, was among those transporting injured workers from the wreckage. “It was chaos; we ran to help whoever and do whatever we could,” he said.
Mon Valley was a focal point of Nippon Steel’s negotiations with President Trump. Two months ago he approved the purchase of U.S. Steel after the Tokyo-based company significantly increased its investment commitments.
Nippon Steel pledged $2.2 billion for upgrades at Mon Valley by 2028, projects that would maintain steelmaking at the mill for years. The to-do list didn’t include major repairs to Clairton’s coke ovens. It will likely cost the company millions of dollars to return the site to normal operations.
The Clairton coking plant—the nation’s largest—has dealt with operational concerns in the past. An explosion at the plant in 2010 injured 20 workers. A catastrophic fire on Christmas Eve 2018 knocked out the plant’s emissions-control system for months afterward.
In February, two employees were sent to the hospital when gases ignited at a coke plant battery, which Allegheny County officials said caused an audible boom and surge in airborne pollutants.
Nippon Steel said work on the planned replacement of the rolling line to make sheet steel would continue, but added, “Our primary focus remains on our employees at our Clairton plant.”
U.S. Steel Chief Executive Dave Burritt said Tuesday that he spoke with Nippon Steel executives following the accident and said they are committed to cooperating with government investigators to determine a cause for the explosion.
“We will take every step necessary to keep our people safe,” Burritt said during a briefing with reporters. “We wouldn’t have done the deal with Nippon Steel if we weren’t absolutely sure that we would have an enduring future.”
U.S. Steel deferred some maintenance and upgrade projects for years in response to a long stretch of financial losses before 2020.
In the months before the deal closed, Nippon Steel Vice Chairman Takahiro Mori visited the Mon Valley complex several times to confirm the company’s interest in preserving American jobs and investing in the mill. The steelmaker later dispatched teams of engineers and other employees from Japan to begin work on the plant upgrades.
The cause of the explosion remains under investigation. Just before the blast, workers were preparing to do routine maintenance on the batteries of ovens that bake coal into coke.
Coke is essential for producing molten iron at U.S. Steel’s blast furnaces in Pennsylvania and Indiana. As part of the coking process, flammable compounds, such as methane, and other impurities are extracted from the coal under heat and pressure, leaving a carbon product behind.
The Clairton plant can produce 3.6 million tons of coke across its six batteries of ovens. The explosion knocked out two batteries, and two more near the blast area were temporarily taken down for repairs.
Emissions from coke plants have been a target for environmental groups for years, especially in Pittsburgh, which has been a hub of steel production for over a century.
U.S. Steel last year settled a lawsuit brought by environmental groups over emissions that stemmed from the 2018 Clairton plant fire. The settlement with the groups and the county included $19.5 million in coke-oven upgrades and $17.5 million in other plant improvements.
The company has said it regretted the incidents and believed the settlement would benefit communities near the mill.
Experts in the litigation provided descriptions of the Clairton plant’s condition.
In court filings, an engineering expert for environmental groups described plant inspections as “sporadic” and said that repairs were delayed by budget constraints. The expert cited an internal company email that mentioned examples of corrosion that included water-supply lines that were rotted “Coke-can thin.”
Do you think Nippon Steel will follow through with promised investments in U.S. Steel facilities? Join the conversation below.A county health department official described the plant in a 2020 deposition as “one of the most decrepit facilities I’ve ever seen in my nearly 30 years of work.”
Borkowski, 40, who works as a union-safety representative, said he thinks the company stays on top of maintenance “for the most part,” but acknowledged that the company needs promised investments from Nippon Steel.
“It’s an aging plant,” said Borkowski, a third-generation steelworker. “I just hope they stick to their word, and I hope they invest the money on the Mon Valley.”