Gary Mayor Eddie Melton says a Japanese company’s potential purchase of U.S. Steel is beneficial for Northwest Indiana, but local environmental groups worry the deal will further permit the use of blast furnaces.
“We remain opposed to this deal based on Nippon Steel’s abysmal global track record on environmental issues,” a Just Transition Northwest Indiana news release said. “Nippon is currently building two outdated blast furnaces in India and is also investing heavily in coal mining operations in Australia and Canada when we must move away from coal and fossil fuels to meet global climate goals. Even their own shareholders in Japan protested these moves simply because it is not a profitable, sustainable model.”
Melton met with Nippon Steel Vice Chairman Takahiro Mori on Thursday to discuss the history of U.S. Steel in Gary and the significance of the American company’s potential purchase.
“As 22nd mayor of the city of Gary, I want to show my support for this effort,” Melton said Thursday. “We need to do our due diligence to make sure this is the right thing for citizens, the right thing for our economy, the right thing for the United States.”
On Tuesday, Bloomberg reported that President Joe Biden plans to block the $14.9 billion transaction. The Committee on Foreign Investment in the United States panel must refer its decision to Biden by Dec. 22 or 23.
Biden had shared in March that he opposed the sale, and Trump had vowed during his campaign that he would block the deal. Vice President Kamala Harris in September also said that she opposed the purchase.
As part of the potential deal, Nippon plans to invest about $300 million into the local Gary Works facility, specifically into the blast furnace. With the investment, the furnace would have its life extended by up to 20 years.
JTNWI and Gary Advocates for Responsible Development have both said they oppose blast furnaces, calling the technology outdated. For steelmaking, both groups would prefer direct reduction furnaces.
Activists have called direct reduction furnaces more environmentally and economically friendly because they use natural gas and could cut carbon dioxide emissions in half.
“They generate significantly less climate-harming, carbon and health-harming emissions,” a GARD news release said. “And when green hydrogen becomes increasingly available and affordable, (direct reduction) furnaces can make the transition to zero carbon emissions.”
GARD argues that blast furnaces will be obsolete by the early 2040s, and both organizations believe Nippon isn’t interested in modernizing Gary Works.
Industrious Labs, an environmental organization focused on cleaning up industries, found in an October report that coal-based steelmaking contributes to an estimated 892 premature deaths, nearly 250,000 asthma symptoms annually and from $6.9 to $13.2 billion in health costs, according to a Dec. 12 email from the company.
U.S. Steel’s coal-based plants contribute to up to 200 of those deaths and more than 55,000 asthma symptoms each year, the company found.
In a Thursday statement, Hilary Lewis, steel director at Industrious Labs, urges Biden to stop the sale.
“Costly relinings do nothing to modernize these aging plants or reduce their pollution,” Lewis said in her statement. “Instead, it delays the urgent transition to cleaner steelmaking — which could slash climate pollution by more than 95% and bring long overdue relief to frontline communities who have endured the health impacts of toxic emissions for far too long.”
During a Thursday press conference, Melton and Mori both continued to say that Nippon will invest in the blast furnace.
Before the press conference, the two men met with GARD to talk about the environment and sustainability, Melton said. GARD members protested outside Gary City Hall prior to the news conference.
“They made a commitment to make sure that’s going to be a priority,” he added. “I appreciate the conversation about making a cleaner steelmaking process.”
Both GARD and JTNWI first said in October that they oppose the blast furnace investment. Melton said then that Nippon had made it clear that they support making investments in cleaner, greener steelmaking technology. He also supports talks between environmentalists and Nippon.
In its news release, GARD calls on Nippon to announce it will build the first U.S. direct reduction furnace at Gary Works; share its long-term plans for modernizing the iron and steelmaking capacity at Gary Works and U.S. Steel; transparently cooperate with city leadership about the feasibility and desirability of replacing Gary Works’ blast furnaces; and partner with Gary to build the foundation for an economically and environmentally sustainable city.
JTWNI members worry about the future of jobs at Gary Works if the blast furnace is relined. U.S. Steel employs about 4,500 at Gary Works and the Midwest plant in Portage.
If Nippon buys U.S. Steel, Mori said they plan to keep jobs in the U.S. Nippon plans to invest nearly $1 billion into the Gary facility and workers, Mori said Thursday.
“Sustainable steel based on (direct reduction) technologies and green hydrogen made only from renewable sources like wind and solar energy is the direction steel manufacturing in Indiana must go to preserve jobs and protect work health and communities,” JTNWI’s release said.
