US Steel’s Slovakia mill may replace blast furnaces with EAFs with state support

Slovakia’s finance minister Igor Matovic said recent talks with top managers of US Steel have been focused on replacing the three current coke-fueled blast furnaces at its US Steel Kosice mill with two electric arc furnaces and other modernization investments to drastically cut the plant’s carbon footprint.

“We want to secure the future of the Kosice plant, there is no other way than decarbonisation,” Matovic said in a press conference May 14 on his return to Bratislava after two days of talks in Pittsburgh. “That means replacing the coke-fueled blast furnaces with electric arc furnaces.”

Matovic added that talks centered on investment in two electric furnaces and other carbon cutting modernizations in moves which would cut carbon emissions at the Kosice steelmaker by 80%.

“Without this investment, steelmaking in Eastern Slovakia will gradually disappear,” the minister warned.

The total investment costs are estimated at around Eur1.5 billion (1.82 billion dollars), Matovic said. Talks with US Steel’s top managers, including CEO David Burritt, were aimed at explaining how the Slovak government’s Renewal and Resilience Plan and Modernization Fund could be used at the Kosice steel mill to transform it into “an environmental leader in Eastern Europe,” he said. The Slovak plan has earmarked Eur363 million for modernization of Slovak industry aimed at reducing carbon emissions with funding possible for the best available technology currently available.

Other investment help could be offered by the Slovak government “within the framework of what is permitted under European Union rules,” Matovic said, without giving further details. “Without this cooperation from Slovakia, the [modernization] investment will not happen,” Matovic warned.

US Steel still has to take a final investment decision on the Kosice modernization, Matovic said. “We will have to see what the result of these discussions [in Pittsburgh] will be. I believe that the decision will be positive, but there is still a long way to go,” he added.

Secretary of State at the Ministry of Finance, Marcel Klimek, who was part of the Slovak delegation, said US Steel is unable on its own to consider the Kosice mill modernization. “US Steel Corporation in the last two years made a combined loss of almost $1.8 billion…. The situation in the steel sector is so unfavorable that many steel mills are closing because of excess capacity, are facing severe financial problems, or have gone bust altogether,” he added.

Many market analysts in the US question whether it would be better for US Steel to focus on its core American business rather than maintain its only significant European steel production operations at Kosice, Klimek said. The EU’s ambitious carbon cutting and environmental targets had raised doubts at US Steel whether there was still a place for heavy industry, such as steel production, in Europe, he added.

US Steel Kosice has raw steel production capacity of 4.5 million mt. It produces and sells slabs, plate, sheet, tin products, spiral welded pipe, and refractory ceramic materials, and mainly serves customers in the car production, construction, container, electrical appliance, oil and gas and petrochemical markets.

— Chris Johnstone