REGIONAL— Uncertainty over the future of two of the Iron Range’s largest taconite facilities continued this week after U.S. Steel filed a federal lawsuit to overturn President Biden’s decision to block the proposed sale of the storied American company to Japan-based Nippon Steel.
Biden announced on Jan. 3 that he was exercising his authority as president to halt the sale out of national security concerns. “A strong domestically owned and operated steel industry represents an essential national security priority and is critical for resilient supply chains,” stated Biden in a prepared press release.
Biden’s decision had strong backing from the United Steelworker’s union as well as Cleveland-Cliffs, U.S. Steel’s leading competitor in the domestic steel industry. U.S. Steel had earlier rejected a proposed $7 billion buyout offer from Cliffs before accepting a $15 billion, all-cash offer from Nippon.
Cliffs CEO Lourenco Goncalves, along with Steelworker’s union president David McCall, had been outspoken in their opposition to the bid from Nippon and both Cliffs and the union now face separate lawsuits filed by U.S. Steel and Nippon for a “coordinated series of anticompetitive and racketeering activities” in an effort to block the deal.
As part of its proposed acquisition of U.S. Steel, Nippon had promised to invest $2.7 billion in improvements to U.S. Steel facilities, including an upgrade of its blast furnace operations in Gary, Ind., and Mon Valley, Pennsylvania. Those operations are the primary users of taconite pellets from U.S. Steel’s Minntac and Keetac mines located on the Iron Range, so the promised investment could have helped guarantee a viable market for taconite pellets well into the future.
U.S. Steel has argued that without Nippon’s investment, it would be forced to shift production away from its aging blast furnace operations in favor of cheaper electric arc furnaces, which can utilize scrap iron as well as direct reduced iron, or DRI, to produce steel.
U.S. Steel has already made moves in that direction. The company announced in 2022 that it would develop a $150 million DRI upgrade at its Keetac plant in Keewatin, an investment that would give the company the ability to serve a greater variety of customers. That new facility, which was expected to create about 33 new jobs, began operation in 2024, adding to the Iron Range’s still somewhat-limited DRI capacity. The vast majority of the region’s production is still shipped out as taconite pellets, a now 70-year-old product developed in the 1950s.
Allegations abound
U.S. Steel President David Burritt reacted angrily to President Biden’s decision to block the Nippon deal, calling it “shameful and corrupt” in a statement issued shortly after the announcement by the White House. “He gave a political payback to a union boss out of touch with his members while harming our company’s future, our workers, and our national security. He insulted Japan, a vital economic and national security ally, and put American competitiveness at risk,” Burritt continued.
According to a joint statement issued by U.S. Steel and Nippon, the two lawsuits filed by the companies in the D.C. circuit court will establish that:
 President Biden ignored the rule of law to gain favor with several unions that opposed the sale.
 That Biden’s undue influence on the Committee on Foreign Investment in the United States, or CFIUS, prevented a good faith review of the proposed sale, depriving the companies of their rightful opportunity for fair consideration. In the end, CFIUS failed to reach a consensus recommendation regarding the sale.
 That Cleveland-Cliffs, in collusion with the leadership of the Steelworkers, sought to prevent the closure of the sale to Nippon or any sale to any company other than Cliffs.
U.S. Steel cited President Biden’s opposition to the deal from shortly after its inception, noting that Biden had announced his opposition to the deal even before CFIUS began its formal review. According to the companies, the Steelworkers union endorsed Biden less than a week after his announced opposition to the deal.
While Biden is set to leave office in less than two weeks, it’s not clear that incoming President Donald Trump will take a different position. Throughout the campaign, Trump repeated his own opposition to the deal and its proposed foreign ownership of a major U.S. steel producer.