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ArcelorMittal to spend $50M to upgrade, restart Monessen coke plant

| Monday, Sept. 17, 2012, 12:32 p.m.
Vic Como and Jack Smith of Monessen leave the ArcelorMittal Coke Plant in Monessen, as they talk to reporters about the plant going into full production in 2014.
Jim Ference  |  Valley Independent
Vic Como and Jack Smith of Monessen leave the ArcelorMittal Coke Plant in Monessen, as they talk to reporters about the plant going into full production in 2014. Jim Ference | Valley Independent

Sixty-seven workers at ArcelorMittal's idled Monessen coke works kept busy during the past three years with maintenance projects. They expected the plant to start up again someday but wrestled with doubts.

Their morale brightened on Monday with an announcement by the world's largest steelmaker that it plans to spend $50 million to upgrade the 1940s-era plant, resume production by May 2014 and add 113 employees, plant manager Paul Champagne said.

“The people here have been working faithfully and diligently through this entire time. I am extremely happy for them,” he said.

ArcelorMittal, based in Luxembourg, said the money will go toward safety, environmental and other improvements that will ensure the plant's future.

The plant can annually produce 370,000 tons of coke — the refined carbon that is a key ingredient in steelmaking.

ArcelorMittal's announcement drew praise from workers, union officials and local leaders, along with caution from environmental groups.

“It's great news. It says something about the economy and the demand for steel,” said PennFuture CEO George Jugovic, adding that the company has an opportunity to exceed minimum environmental standards in a region that's out of compliance with clean air rules.

The state Department of Environmental Protection is considering ArcelorMittal's requests for operating and other permits, and the company said it's working to obtain needed regulatory approvals.

“We will keep an eye on the permits and make sure the (DEP) does what it needs to do,” Jugovic said.

“Trying to resurrect ovens that are as old as that strikes us as a pretty difficult thing to do,” said Myron Arnowitt, Clean Water Action's state director. “This will add a significant pollution source. There is hardly a coke plant out there that is perfect. We would take a close look at it.”

Coke made in Monessen would go into blast furnaces at ArcelorMittal's North American steelmaking operations to help offset the need to buy coke at high prices. It is one of 23 coke plants in the United States.

ArcelorMittal owns plants in Warren, Ohio, and Burns Harbor, Ind., and buys coke under long-term contracts, some of which expire next year.

“Not that the steel industry is doing great,” Champagne said, “but coke is expensive on the world market, and most companies are reaching the point now where they have to secure supplies.”

In Western Pennsylvania, U.S. Steel Corp. is spending $500 million to upgrade its Clairton coke plant, the nation's largest, while DTE Energy is spending $34 million through 2017 to improve its Shenango plant on Neville Island. Both projects are designed to boost environmental performance and efficiency.

“The industry wants a good supply of coke, and that's what we make,” worker Vic Como of Monessen said as he left the plant on Monday.

“We're working in there all the time, getting everything ready,” said Jack Smith of Carroll. “We want to start up like they do. We want to get going.”

A recall list will be the initial resource used to fill the 113 jobs.

Laid-off workers who found new jobs, but want to return to the plant when it restarts, can leave their former positions to others who need them, said Ike Gittlen, a staff representative for the United Steelworker's Basic Steel Industry Conference. “This bodes well for the steel industry and shows there's investment coming back into manufacturing.”

ArcelorMittal plans to resume cokemaking in Monessen with 180 workers, the same number the plant had when it went into “hot-idle” status in May 2009. The coke batteries must be kept hot to prevent damage, and natural gas is burned in the ovens to keep them at about 2,000 degrees Fahrenheit.

The plant once was part of a full steelmaking complex owned by Pittsburgh Steel Co., which later became Wheeling-Pittsburgh Steel Corp.

Wheeling-Pitt went through multiple bankruptcies and sold the plant to Sharon Steel, also under bankruptcy protection, Champagne said, and Sharon idled it in 1992.

Koppers Inc. restarted the coke works when it purchased it in 1995 but sold it to ArcelorMittal for $160 million in 2008. Coke production halted the next year, as the recession slowed the steel industry.

A succession of cash-strapped owners in much of its history meant little was spent to update the plant, Champagne said. Much of the equipment scheduled to be replaced or overhauled is original.

The project includes installing structural steel in some areas and building a treatment system for wastewater discharged to the Monongahela River.

“Not too many areas of the plant will remain untouched,” Champagne said.

Monessen Mayor Mary Jo Smith said ArcelorMittal officials won't speak with her because of potential legal issues involving recently approved ordinances that give the city more control over the riverfront. The changes would require the company to get the city's permission for a wastewater treatment facility.

“I don't want to stop jobs, but I'm not going to cripple Monessen,” said Smith, who has been working with other city officials on a revitalization plan. “We have to protect the future for Monessen, in case (ArcelorMittal is) not here anymore.”

Staff writer Chris Buckley contributed to this report. Kim Leonard is a staff writer for Trib Total Media. She can be reached at 412-380-5606 or kleonard@tribweb.com.

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