Released June 05, 2008 | SUGAR LAND
en
Researched by Industrial Info Resources (Sugar Land, Texas)--The $1 billion grassroot steel mill built by SeverCorr LLC, a subsidiary of SeverStal Group (MCX:CHMF) (Moscow, Russia), in Columbus, Mississippi, is only one of the many steps along the way for SeverStal in strengthening its foothold in the United States steel market. In the U.S., the cash-rich SeverStal is quickly moving to the top tier of steel producers in terms of production capacity with numerous integrated steel acquisitions as of late. The company owns a 50% interest in Mountain State Carbon LLC in Follansbee, West Virginia; a 3 million-ton-per-year integrated steel mill in Dearborn, Michigan; and its latest acquisition, the Sparrows Point steel mill in Maryland.
Currently, a $100 million pickling line addition and environmental upgrades are being implemented at the Dearborn plant (formerly Ford's (NYSE:F) (Dearborn) River Rouge mill), operated by SeverStal North America Incorporated (Dearborn). The company is also anticipating a major reline of blast furnace-B in a few years, and that will come with an additional price tag of $180 million.
SeverStal's latest acquisition of a mill in Sparrows Point, Maryland, from ArcelorMittal Steel (NYSE:MT) (Luxembourg) (Sparrows Point, Maryland) is already inspiring additional investment ideas and plans. SeverStal hopes to install new coke ovens as the first step in bringing the mill back to its 3.6 million-ton-per-year capacity. The acquisition alone ran over $800 million in cash. The coke plant project, once the necessary permits are obtained, will cost an additional $550 million. It has been 17 years since Sparrows Point has processed its own coke. The coke ovens at the site were shut down because of a persistent pollution problem; now new technologies are available that obliterate pollutants before they are released into the air. Coke is an important part of the integrated steelmaking process that makes use of a blast furnace to produce iron. Metallurgical coke is used to fire those furnaces in which the iron ore is smelted. Coal is baked in special ovens at extremely high temperatures, removing all traces of moisture and then converted into coke. Currently, Sparrows Point purchases its coke supply from both foreign and domestic suppliers on a contract basis.
Sparrows Point has had a major blast furnace rebuild in the planning stages since the ArcelorMittal tenure, and that project remains in an economic development stage with a possible kickoff in 2012. The cost associated with a major blast furnace rebuild can run as high as $300 million. An interim reline (shot treatment) on the blast furnace, performed to extend the furnace's campaign life, will be completed later this year.
SeverStal said it also has plans to spend $500 million in addition to the cost of the coke plant over the next five years to bring Sparrows Point to its full capacity of 3.6 million tons per year. This amount may well include the cost of the rebuild to the blast furnace.
With the ink barely dry on the purchase papers for Sparrows Point, SeverStal is already looking to acquire more steel-related assets in the U.S. First, it has the purchase of WCI Steel (Warren, Ohio) pending. This latest $140 million cash purchase is subject to the normal regulatory approvals. Also on the table is the potential purchase of Esmark Incorporated (Chicago Heights, Illinois) for $670 million. But, SeverStal is not the only corporation looking to purchase the former Wheeling-Pittsburgh Steel mills at Steubenville North Steel, Steubenville Mingo Junction South Mill and Martins Ferry Hot Dip Galvanizing Plant, along with other properties that would be included in the sale. Esmark acquired Wheeling-Pittsburgh Steel in late 2007. Essar Steel Holdings Limited (Mumbai, India) has shown a marked interest in buying Esmark and has an offer on the table. If SeverStal is victorious in its bid, Wheeling-Pittsburgh Steel Corporation, Esmark Steel Services and a 50% remaining share in its joint venture with Esmark in the Mountain State Carbon LLC, a blast furnace coking plant in Follansbee, West Virginia, would all become part of SeverStal U.S. holdings.
View Plant Profile - 1065820 1013542 1514765
View Project Report - 26000913 26001173 26001198 26001197 18002295 18002593 03002758
Industrial Info Resources (IIR) is a marketing information service specializing in industrial process, energy and financial related markets with products and services ranging from industry news, analytics, forecasting, plant and project databases, as well as multimedia services.
Currently, a $100 million pickling line addition and environmental upgrades are being implemented at the Dearborn plant (formerly Ford's (NYSE:F) (Dearborn) River Rouge mill), operated by SeverStal North America Incorporated (Dearborn). The company is also anticipating a major reline of blast furnace-B in a few years, and that will come with an additional price tag of $180 million. SeverStal's latest acquisition of a mill in Sparrows Point, Maryland, from ArcelorMittal Steel (NYSE:MT) (Luxembourg) (Sparrows Point, Maryland) is already inspiring additional investment ideas and plans. SeverStal hopes to install new coke ovens as the first step in bringing the mill back to its 3.6 million-ton-per-year capacity. The acquisition alone ran over $800 million in cash. The coke plant project, once the necessary permits are obtained, will cost an additional $550 million. It has been 17 years since Sparrows Point has processed its own coke. The coke ovens at the site were shut down because of a persistent pollution problem; now new technologies are available that obliterate pollutants before they are released into the air. Coke is an important part of the integrated steelmaking process that makes use of a blast furnace to produce iron. Metallurgical coke is used to fire those furnaces in which the iron ore is smelted. Coal is baked in special ovens at extremely high temperatures, removing all traces of moisture and then converted into coke. Currently, Sparrows Point purchases its coke supply from both foreign and domestic suppliers on a contract basis.
Sparrows Point has had a major blast furnace rebuild in the planning stages since the ArcelorMittal tenure, and that project remains in an economic development stage with a possible kickoff in 2012. The cost associated with a major blast furnace rebuild can run as high as $300 million. An interim reline (shot treatment) on the blast furnace, performed to extend the furnace's campaign life, will be completed later this year.
SeverStal said it also has plans to spend $500 million in addition to the cost of the coke plant over the next five years to bring Sparrows Point to its full capacity of 3.6 million tons per year. This amount may well include the cost of the rebuild to the blast furnace.
With the ink barely dry on the purchase papers for Sparrows Point, SeverStal is already looking to acquire more steel-related assets in the U.S. First, it has the purchase of WCI Steel (Warren, Ohio) pending. This latest $140 million cash purchase is subject to the normal regulatory approvals. Also on the table is the potential purchase of Esmark Incorporated (Chicago Heights, Illinois) for $670 million. But, SeverStal is not the only corporation looking to purchase the former Wheeling-Pittsburgh Steel mills at Steubenville North Steel, Steubenville Mingo Junction South Mill and Martins Ferry Hot Dip Galvanizing Plant, along with other properties that would be included in the sale. Esmark acquired Wheeling-Pittsburgh Steel in late 2007. Essar Steel Holdings Limited (Mumbai, India) has shown a marked interest in buying Esmark and has an offer on the table. If SeverStal is victorious in its bid, Wheeling-Pittsburgh Steel Corporation, Esmark Steel Services and a 50% remaining share in its joint venture with Esmark in the Mountain State Carbon LLC, a blast furnace coking plant in Follansbee, West Virginia, would all become part of SeverStal U.S. holdings.
View Plant Profile - 1065820 1013542 1514765
View Project Report - 26000913 26001173 26001198 26001197 18002295 18002593 03002758
Industrial Info Resources (IIR) is a marketing information service specializing in industrial process, energy and financial related markets with products and services ranging from industry news, analytics, forecasting, plant and project databases, as well as multimedia services.
