US based Cleveland-Cliffs has announced a $1 billion optimization project at its Middletown Works plant in Ohio, half of it funded by a $500 million US Department of Energy (DOE) grant. The company said on August 21 that the DOE has set a framework for finalizing negotiations and implementation plans, with the money to be spent over the next four years while the mill keeps producing.
Middletown Works is Cliffs' flagship plant for automotive-grade steel, particularly the exposed grades used on car, truck and SUV body panels. The project covers upgrades to the blast furnace, new material handling infrastructure and AI-enabled process control systems. It also includes a cogeneration facility that will capture blast furnace gas and burn it on site to make electricity and steam, which the company expects to cut energy costs and reduce how much power it has to buy from the grid. Work is due to begin in the coming weeks, with the blast furnace rebuild scheduled for completion in the first quarter of 2030.
The plant currently produces around 3 million net tons of raw steel per year, and Cliffs said the project will preserve that capacity while improving reliability, productivity and cost competitiveness. The company put the number of jobs preserved at 2,300, with more than 1,500 workers employed at peak construction, including local union building trades.
The $500 million was initially awarded to Cliffs in 2024 under the Biden administration's industrial decarbonization program, and the original plan was to move away from blast furnace entirely and replace it with a 2.5 million mt per year hydrogen-ready direct reduced iron (DRI) plant plus two 120 MW electric melting furnaces, ending coke use at the site. Cliffs later stepped away from that design, with chairman and CEO Lourenco Goncalves telling shareholders that the hydrogen supply simply would not be there. Media sources say that rather than cancel the award, Cliffs and the DOE rescoped it, and the money now goes toward keeping the blast furnace route running rather than replacing it.
Goncalves framed the revised project as going beyond a standard blast furnace reline and said the DOE's support shows the importance of preserving blast furnace production of automotive-exposed grades in the US. Vice President J.D. Vance, who grew up in Middletown, appeared at the plant alongside Energy Secretary Christopher Wright and Ohio officials to mark the announcement.
.jpg)