ERP Iron Ore and Republic Steel Announce Lorain, Ohio Pig Iron Joint Venture

26 July 2017

Republic Steel and ERP Iron Ore, LLC have signed a Memorandum of Understanding relating to the formation of a joint venture to produce pig iron at Republic’s steel mill located in Lorain, Ohio. When fully operational the Lorain mill is expected to produce up to one million net tons of pig iron per annum. The Joint Venture will serve the increasing demand for virgin iron required to produce steel in the Electric Arc Furnace (“EAF”) sector.

The Joint Venture benefits from the existing infrastructure located at Republic’s plant in Lorain, Ohio, including its blast furnaces, and its location along the Black River providing cost-effective shipping to major EAF steel producers. ERP plans to rail iron ore pellets to Lorain from its Reynolds, Indiana plant which was recently constructed at a cost in excess of $400 million.

The Joint Venture represents a new chapter of industrial growth in the heartland of America. Lorain, Ohio has played an important part in the history of American steel beginning in 1895 when the first shipment of steel left on six barges for New York City via the Erie Canal. In 1899, the first blast furnaces were completed at Lorain. America has a long history of pig iron production. In 1890 the U.S. surpassed Great Britain in pig iron production, and subsequently became the world’s leading producer of pig iron.

In recent years, American pig iron production declined as imports subsidized by foreign governments replaced the domestic production of pig iron. In 1979, the U.S. Treasury Department ruled pig iron imported from Brazil was being subsidized by the Brazilian government. It was concluded that 16 Brazilian exporters received government subsidies averaging 24 percent. Today, pig iron is almost exclusively imported from the Ukraine, Brazil, and Russia. In an era when traditional blast furnace steel production is being displaced by state-of-the art EAF production, the Republic-ERP pig iron Joint Venture represents an important step in protecting North American independence in steel production.

“We are excited to announce this new venture and look forward to utilizing our assets in Lorain, Ohio to bring back production of pig iron which was previously displaced by foreign imports…” Republic President and CEO Jaime Vigil said in a statement. ERP CEO Tom Clarke added, “We are very excited to partner with Republic in rebuilding a U.S. industry and providing employment in areas economically depressed by foreign imports.”