ISG Plans Major Overhaul of Burns Harbor Steel Works

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Researched by Industrialinfo.com (Industrial Information Resources, Incorporated, Houston, Texas). International Steel Group (ISG) (Richfield, Ohio) is planning a major overhaul of its Burns Harbor (Indiana) Steel Works (Plant 1013565). The estimated price tag for the overhaul could exceed $325 million. Approximately $82 million, of that figure will be invested in Primary Operations (iron and steel production). About the same amount will be spent on major mill environmental upgrades (PEC 11002293). Another $80 million of the total will go toward upgrading or replacing the mill's existing pickling lines. About $49 million is earmarked for a computer technology upgrade, and the final $32 million will go to unspecified miscellaneous projects.

Burns Harbor's two existing pickling lines will either be upgraded or completely replaced, depending on projected cost and feasibility. Engineers have been comparing costs on the two options and have gone out for cost estimates from selected suppliers. Engineering and construction bids are tentatively expected to be released by the end of this year, and work should begin by the end of next year. Targeted completion date for the pickling line work is for sometime between the end of 2005 and mid-2006 (PEC 11002292).

The environmental upgrade will include installing baghouses and controls on two blast furnaces (C&D) and the basic oxygen furnace. The environmental project is still in the design phase at the present time, with construction expected to begin at the end of 2004. According to a company spokesman, the company still has advanced engineering to do on the project (PEC 11002293). ISG is also considering alternative suppression methods to the iron oxide suppression treatment. Deadline for the new Environmental Protection Agency requirements is in 2006, so upgrades will have to be completed by then.

Pre-outage work on the coke plant has been going on for about a month, and the planned 20-day hot-idle outage has recently begun.

TMP Worldwide, Incorporated (now Monster Worldwide, Incorporated) (New York, New York), through the IT Solutions Practice Group of its eResourcing Division, provides all information technology systems for ISG facilities in Cleveland (Plants 1014868 and 1027579) and Warren (Plant 1049260), Ohio; Hennepin (Plant 1061413) and Riverdale (Plant 1014919), Illinois; East Chicago Indiana Harbor (Plant 1009535), Indiana; as well as ISG's corporate headquarters in Richfield, Ohio (Company 1076181).

Richfield-based International Steel Group, with 14,261 employees, is the second-largest integrated steel company in the United States, based on capacity. ISG was formed in March 2002, when W.L. Ross bought out the bankrupt Cleveland, Ohio-based LTV Corporation for $325 million. In October 2002, ISG bought Acme Steel for $60.9 million. Then, in April 2003, ISG bought out the remaining assets of Bethlehem Steel for $1.5 billion. Since that time, ISG has undertaken extensive upgrade work on those mills, and has completed it in record time. ISG has steel-making capacity of approximately 18 million tons per year.

ISG recently filed an IPO registration with the Securities and Exchange Commission, and plans to sell up to $250 million worth of common stock under the ticker symbol ISG, eyeing possible further expansion (company officials were recently reported to have been looking at the bankrupt Weirton Steel). In its first nine months, ISG reported a net income of $69.6 million; in the first quarter of 2003, it reported a net loss of $1.6 million, as compared to a $17 million net loss reported by rival U.S. Steel.

W. L. Ross & Company (and affiliates) presently owns about 51 percent of ISG; Cleveland Cliffs owns 7.1 percent; Howard Hughes Medical Institution owns 10.4 percent; and Georgia Financial LLC owns 11.4 percent. The company declined to reveal what the common stock would sell for, once the listing becomes active.