Sierra Leone woos miners to clean energy with $11 billion plan
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Nippon Steel Corp. announced $1.3 billion in investments at US mills owned by United States Steel Corp. as the Japanese company steps up efforts to win over workers and politicians for its bid to buy the Pittsburgh-based steelmaker.
Seeking to allay concerns over job security at plants that use traditional blast-furnace production from iron ore, Nippon Steel said it would spend the money at the Mon Valley and Gary Works as part of its pending $14.1 billion takeover of US Steel. The American company’s shares rose on Thursday.
Mon Valley, where founder Andrew Carnegie built his first mill in the 1870s, and Gary are among remaining blast furnaces that are typically unionized and, in some cases, are being replaced by cleaner technologies. Committing to extend their lifelines may help Nippon Steel garner support from the United Steelworkers union, which has so far opposed the corporate tie-up.
“If I were a union member and I saw that announcement, I would feel a good amount of comfort that I’m going to have a job,” Wolfe Research analyst Timna Tanners said in an interview.
Still, union opposition — which has increased the political pressure on lawmakers in an election year — is holding firm.
“Nippon is still trying to hide behind its North American shell company to shield itself from its contractual obligations to retirees and our communities, and it still needs to answer to pressing concerns regarding our critical supply chains and national security,” United Steelworkers said after Nippon Steel’s Wednesday announcement.
The deal has been at the center of a political firestorm, with politicians from both sides of the aisle expressing concern over the takeover of the iconic American steelmaker. It remains before regulators, including a review by the Committee on Foreign Investment in the US, or Cfius.
President Joe Biden has pledged that US Steel will remain American-owned, though has stopped short of killing the deal as a security review process proceeds. Former president Donald Trump has said he’d block the deal, while the campaign of Vice President Kamala Harris has so far declined to take a public position.
Cfius reviews can ultimately end up on a president’s desk for a decision, though it’s not clear whether that would happen while Biden is still in office or after Trump or Harris are inaugurated.
Shares of US Steel rose as much as 1.9% Thursday in New York. Nippon Steel shares closed 0.9% lower in Tokyo.
“Nippon Steel has done almost everything to allay fears of their takeover,” such as guaranteeing existing union contracts and visiting communities where US Steel has plants, said Amir Anvarzadeh, a Japanese equities strategist at Asymmetric Advisors Pte.
The latest announcement is a result of the union asking for additional concessions, though the deal very much depends on the results of the US presidential election, he said.
(By James Attwood and Sana Pashankar)
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