The American company Cleveland-Cliffs has announced a $1 billion optimization project for its Middletown Works plant in Ohio, half of which is funded by a $500 million grant from the U.S. Department of Energy. On August 21, the company announced that the Ministry of Energy has set a framework for completing negotiations and drawing up implementation plans, and the money will be spent over the next four years while the plant continues to produce products.
Middletown Works is Cliffs' flagship steel plant for the automotive industry, in particular for the manufacture of body panels for passenger cars, trucks and SUVs. The project provides for the modernization of the blast furnace, the creation of a new infrastructure for processing materials and process control systems with artificial intelligence support. The project also includes a cogeneration plant that will capture blast furnace gas and burn it on site to generate electricity and steam, which the company expects will reduce energy costs and reduce the amount of electricity it has to buy from the grid. Work is expected to begin in the coming weeks, and the reconstruction of the blast furnace is scheduled to be completed in the first quarter of this year. 2030.
The plant currently produces about 3 million tons of steel per year, and according to Cliffs, the project will maintain this capacity as long as reliability, productivity and economic competitiveness are improved. The company estimates that the number of jobs saved was 2,300, with more than 1,500 people employed in construction at its peak, including local unions involved in building construction..
Cliffs originally received $500 million in 2024 as part of the Biden administration's industrial decarbonization program, and the initial plan was to completely phase out the blast furnace and replace it with a 2.5 million-ton-per-year direct iron reduction (DRI) plant powered by hydrogen, plus two 120 MW electric melting furnaces, which allows you to eliminate the use of coke in the enterprise. Cliff later stepped aside based on this project, and Larchenko Goncalves, chairman of the Management Board and CEO, told shareholders that there simply would be no hydrogen reserves. Media sources say that instead of canceling the award, Cliffs and the Department of Energy reassigned it, and now the money is going to maintain the blast furnace, not replace it.
Gonsalves described the revised project as going beyond the standard blast furnace modernization scheme and said that the Department of Energy's support demonstrates the importance of maintaining blast furnace production in the United States for brands affected by cars. Vice President J.D. Vance, who grew up in Middletown, showed up at the plant along with Energy Secretary Christopher Wright and Ohio officials to mark the announcement.
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