U.S. Steel’s lawsuit accusing a Canadian company of refusing to pay for millions of tons of iron ore pellets is heading to arbitration.
The October lawsuit, filed in federal court in Pittsburgh, claimed Ontario-based Algoma Steel violated its agreement to buy the pellets from U.S. Steel. The deal was signed in 2020 and ran through 2027.
The dispute will now be overseen by a panel of three neutral arbitrators, following a Dec. 12 order from U.S. District Judge Marilyn Horan.
In September, Algoma turned to a court in its home city to get the contract voided, claiming the Unites State’s import tax meant its blast furnaces were “no longer competitive in the American market.”
U.S. Steel’s lawsuit came in response. In the complaint, the company claimed Algoma already owed it $22 million. Potential losses could reach close to $100 million, the firm said.
Judge Horan simultaneously rejected an effort by Algoma to dismiss the case, which was based on the argument the lawsuit did not belong in a Pennsylvania court.
Algoma has noted the pellets come from Minnesota mines and it sends money to U.S. Steel’s bank account in Illinois.
The judge found, however, that money also went to a U.S. Steel account in Pittsburgh. The original contract also expressly said any issues will be handled within the state, Horan wrote in an opinion.
Algoma did not immediately return a request for comment.
