On August 29, Nippon Steel Co. announced that it would spend an extra $1.3 billion on investments in two US Steel Co. plants once its attempt to purchase US Steel for $14 billion goes through. The latest plans almost double a previous announcement earlier this year to spend $1.4 billion on other improvements through 2026, increasing the total to $2.7 billion.
But despite the promises, Nippon Steel’s acquisition of US Steel remains contentious, with the United Steelworkers and several prominent U.S. politicians opposed to the purchase of the one-time U.S. metals giant by a foreign company.
In a statement, Nippon Steel Vice Chairman Takahiro Mori said the latest investments would allow Nippon Steel to continue operating the Pittsburgh, Pennsylvania, and Gary, Indiana, plants.
“We are excited to build upon the strong steelmaking legacy in the Mon Valley and Gary for the benefit of all stakeholders and the American steel industry for generations to come,” said Mori.
The latest promised investments would see $1 billion go towards increasing high-grade steel capacity at the Pittsburgh plant and the other $300 million towards extending the production life of one of the Gary plant’s blast furnaces. That’s in addition to $1.4 billion in “maintenance and other necessary capital investments” Nippon announced for US Steel properties in March.
For its own part, Nippon Steel has cast its agreement to purchase U.S. Steel as a way of hindering the Japanese and U.S. steel industry’s largest rival, China.
In March, a day after President Joe Biden commented that US Steel should remain domestically owned, the Tokyo-based metals company said in a release that the planned acquisition would “strengthen American supply chains and economic defenses against China.”
“No other U.S. steel company on its own can meet this challenge while also meeting antitrust requirements,” the company added, additionally promising the United Steel Workers there would be “no layoffs or plant closures until September 2026 under some conditions.”
The industrial dominance of China is a concern for Nippon Steel even in its home country. On August 30, Vice Chairman Mori said Japan should adopt similar trade policies to the United States and Europe to restrict Chinese steel imports.
