(Corrects headline to clarify that coking, finishing operations
are not affected.)
By Allison Martell
TORONTO Oct 29 United States Steel Corp
said on Tuesday it will permanently shut down iron and
steelmaking operations at its Hamilton, Ontario, mill at the end
of this year.
The integrated mill was idled in 2010, but the steelmaker
had not ruled out restarting production if the market improved.
Coke-making and steel finishing operations in Hamilton are not
affected, said U.S. Steel spokeswoman Courtney Boone.
The decision is a blow to Hamilton, long the center of
Canada's steel industry, which has been hit hard by plant
closures over the last decade.
"It is disappointing, very disappointing for both our
workers and the community in Hamilton that has a long history of
making good steel," said United Steelworkers spokesman Tony
U.S. Steel's mills in Hamilton and Nanticoke, Ontario, were
the subject of a legal dispute with the Canadian government over
job-protection promises made when the company bought Canadian
steelmaker Stelco in 2007.
When the conflict was settled in 2011, a Canadian minister
said U.S. Steel had agreed to operate both plants until 2015.
"We are in compliance with our agreement with the Government
of Canada," said Boone, who declined to comment further.
A spokeswoman for Minister of Industry James Moore said the
shutdown is a business decision.
"The government does not get involved in the day-to-day
decisions of companies," said spokeswoman Jessica Fletcher, in
an emailed statement. "The government's settlement with U.S.
Steel contains commitments which provide economic benefit for
A slowdown in China, the world's biggest consumer and
producer of steel, combined with massive excess capacity, has
weighed on steelmakers' profits around the world.
At the same time, a fairly strong Canadian dollar has raised
costs for U.S.-based manufacturers operating in Canada.
When it was operating, the Hamilton works had an annual raw
steelmaking capacity of 2.3 million short tons.
Chief Executive Mario Longhi said the Hamilton closure, part
of an initiative dubbed "Project Carnegie" after steel magnate
Andrew Carnegie, would reduce costs by about $50 million a year.
The change will also allow it to shut down two aging coke
batteries at Gary Works in Indiana. The company will let some
iron ore supply contracts expire in 2013 and 2014.
In Hamilton, 47 nonunionized employees will be affected,
Boone said, but the move does not affect any unionized workers.
At Gary Works, 120 employees will be reassigned.
U.S. Steel will take a noncash charge of about $225 million
in the fourth quarter because of the closure, Longhi said.
The company reported its third quarter results on Monday,
taking a $1.8 billion impairment charge linked to the weak
Shares jumped on the news, closing up 8.8 percent at $25.47
on the New York Stock Exchange.
(Additional reporting by Euan Rocha in Toronto, Nicole Mordant
in Vancouver and David Ljunggren in Ottawa; Editing by Janet
Guttsman, Matthew Lewis and Bob Burgdorfer)