American steel giant US Steel has decided to cancel plans to expand its iron ore pellet operations at Keewatin, Minnesota and cease with further development of its carbon alloy facilities at the Gary Works in Gary, Indiana.

The Keewatin expansion would have increased production capacity at the plant by 3.6Mt, taking the annual capacity up to 9.6Mt. The plan was to upgrade and restart an idled pelletizing line and upgrade the mining, concentrating and agglomerating processes. Permits required for this expansion expire this month (September) and will not be renewed, claims US Steel.

Additional investments planned for the carbon alloy facilties of the company's Gary Works in Gary, Indiana, USA, will go no further. Started in 2011, the project 'contemplated the construction of two modules to provide a carbon alloy material used to replace traditionally manufactured coke, to the Gary Works' blast furnaces'. While one module has been built and will be permanently idled, a second module will not be constructed, claims US Steel.

By not going ahead with these projects, US Steel saves over US$800 million. According to the company, "We estimate that these two strategic actions will result in a non-cash, pre-tax charge of approximately US$250 million in the third quarter, which includes approximately US$40 milion for Keetac and approximately US$210 million for Gary Works."

US Steel claims that its future raw materials needs for iron ore and coke were sufficient, negating the need to go ahead with the two projects. "The previously announced examination of alternative iron and steelmaking technologies such as gas-based, direct-reduced iron (DRI) and electric arc furnace (EAF) steelmaking are not affected by these decisions," said US Steel.

Mario Longhi, US Steel's president and CEO, said that 'the decisions to stop further efforts relative to these investments represent another step in our transformation to earn the right to grow'. He added that they allow the company to redirect funding to further develop advanced high strength steels and capital expenditures 'to update and modernise our operations'.