SunCoke Energy, Inc. announced it has entered into a non-binding letter of intent with United States Steel Corporation that sets out the principal terms and conditions upon which SunCoke would process iron ore supplied by US Steel to manufacture granulated pig iron for US Steel on a 10-year initial term.
According to a press release, the parties are currently assessing capital and other project requirements, with the goal of entering into definitive agreements once these assessments are complete. The agreements would include SunCoke's acquisition of blast furnaces and other ancillary assets at US Steel's Granite City Works.
The permitting and construction of the contemplated granulated pig iron facilities with a combined annual production capacity of 2.0 million tons is expected to take approximately two years. SunCoke will continue to operate its Granite City coke plant, supplying coke to the Granite City Works blast furnaces.
In a separate press release, US Steel said that because the iron ore SunCoke uses to produce pig iron would come from US Steel’s own mines, the company would realize a significant cost advantage. The pig iron, which can be used by EAFs, and is expected to supply US Steel’s growing fleet of EAFs.
"This project significantly enhances SunCoke's current footprint allowing us to become a diversified supplier of coke and metallics to the steel industry. It also demonstrates our long-term customer's confidence in SunCoke's operational and technical expertise." said Mike Rippey, President and Chief Executive Officer of SunCoke Energy, Inc.