“The project confirms Cleveland-Cliffs as a world-class technological leader in steelmaking,” said Lourenco Goncalves, Cliffs’ chairman, president and CEO. “Following our recent real life trials with hydrogen-reduction at Indiana Harbor and Middletown, and our well recognized success in Direct Reduction in Toledo, OH, this project is a natural next step.”
The company told the Journal-News in March it would receive $500 million that would be used to help to decarbonize its Middletown plant and would keep 2,500 jobs at the plant.
A recent report from Politico stated the company’s commitment was in jeopardy; the news release issued Monday is in response to that report.
“I’m still trying to figure out if it even makes sense with the grants because the grant is $500 million; the entire project is $1.6 billion. I still have to pony up $1.1 billion,” Goncalves told Cleveland.com. “I’m not going to do it if the government and the general public are not really supportive of that.”
He told the newspaper that even with the help of the federal grant, the steel produced would carry higher costs, a price buyers — mostly in the auto industry — he said are unwilling to pay.
“There are only two ways to fix that: One is they change their minds and pay. So far, not very successful. The other way is for me to go back to what I was before and emit more,” Goncalves said. “That’s a decision that I’m going to have to make very soon.”
The release on Monday said that if the project is awarded, the company will replace its existing blast furnace at its Middletown Works Facility in Middletown with a 2.5mtpa Hydrogen-Ready Direct Reduced Iron (DRI) Plant and two 120 MW Electric Melting Furnaces (EMF) to “feed molten iron to the existing infrastructure already on site, including the BOF, Caster, Hot Strip Mill, and various finishing facilities.”
Middletown Works “will maintain its existing raw steel production capacity of approximately 3 million net tons per year and will no longer use coke for iron production. The EMF technology is well-established and, together with the injection of hydrogen in blast furnaces, is a preferred route for meaningful reduction in carbon emissions for integrated steelmakers worldwide,” the release states.
The flex-fuel DRI plant and EMFs will require 170 additional jobs. The project will result in 1,200 building trades jobs during peak construction, according to the company.
In addition to emissions reduction in high-quality iron and steel making, the byproduct of the electric melting furnaces can be used as a Portland cement substitute, resulting in significant reductions in emissions, energy usage, and consumption of raw materials associated with cement manufacturing.
Hilary Lewis, steel director for Industrious Labs, called the hydrogen plant “a crucial step toward revitalizing American manufacturing, fostering healthier communities and creating future-proof jobs. With this investment, the Biden administration has notched its first win in the global transition to green steel.”
The process will dramatically reduce carbon emissions intensity, and will consolidate Middletown Works as the most advanced, lowest GHG emitting integrated iron and steel facility in the world, according to the company.
“The facility will have the flexibility to be fueled by natural gas, which would reduce current ironmaking carbon intensity by over 50%; a mix of natural gas and clean Hydrogen; or clean Hydrogen, which would reduce current ironmaking carbon intensity by over 90%,” the company said.
“The net capital outlay for Cliffs will be approximately $1.3 billion, net of capital avoidance on the existing blast furnace and coke plants, over a 5-year period primarily starting in 2025 and expected to conclude by 2029, the company said. Cliffs’ portion will be funded using liquidity on hand and its own free cash flow generation.
“The Middletown site offers enough available space to construct the new facility without encumbering the existing processes, effectively eliminating interference risks during the construction and commissioning phase,” it announced.
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