United States Steel Corp. invested in direct-reduced-grade pellet capabilities at its Minnesota Ore Operations Keetac plant. The investment marks a step forward in U.S. Steel’s metallics strategy by supplying the increasingly tight DR-grade pellet market and provides the company with the flexibility to feed a potential future direct reduced iron (DRI) or hot briquetted iron (HBI) facility. DRI and HBI are important electric-arc furnace (EAF) metallics inputs. The $150 million investment expands on the company’s existing competitive advantage in low-cost iron ore. U.S. Steel broke ground on the facility in the third quarter of 2022. The facility is expected to be operational in late 2023, with first pellets produced in 2024.
In addition to producing DR-grade pellets to ultimately feed EAFs, the production facility will maintain flexibility to continue producing blast-furnace-grade pellets. Upon completion, the company could also sell the new pellets to third-party DRI or HBI producers.