Justice Dept. OKs sale of Sparrows Point Steel Mill

The Baltimore Sun reported on Apr. 15 that the Department of Justice approved the sale of ArcelorMittal’s Sparrows Point steel plant to Russian steelmaker OAO Severstal.

According to USW Local 9447 President John Cirri, representing the 2,300 steelworkers at ArcelorMittal’s Sparrows Point steel mill in Baltimore, “We’re one step closer.” He refers to the required sale by the U.S. Justice Dept. under anti-trust law that forced a spin-off of the plant to another buyer. USW International President Leo W. Gerard and David McCall have both been closely involved in the intense efforts with potential buyers to find a deal assuring long term job security that was acceptable to the union under terms of the labor agreement regarding a successor company.

“The division has granted its approval to the Trustee’s proposed sale of Sparrows Point to Severstal,” Gina Talamona, a spokeswoman for the department, said in a statement.

With USW support, Severstal announced last month that it had agreed to buy the 119-year-old Baltimore County plant for $810 million in cash. The government-ordered sale was overseen by a trustee appointed by the U.S. Department of Justice. The company plans to close on the sale in the next month.

“Severstal is working diligently to close the deal in the second quarter,” said Michael Henson, a spokesman for the company. Severstal must now also get approval from the Committee on Foreign Investment in the United States.

The Justice Department ordered Luxembourg-based ArcelorMittal, the world’s largest steelmaker, to sell Sparrows Point because of antitrust concerns over the production of tin plate, which is used to make cans, among other things. A deal to sell the plant to a joint venture led by Esmark Inc. of Illinois for $1.3 billion failed in December because the buyer was not able to secure financing and a labor agreement.

Assuming the sale closes, Severstal will be the fourth owner of Sparrows Point in five years. The plant was owned by the now-defunct Bethlehem Steel Corp. for 87 years before it was taken over by International Steel Group in 2003. ISG sold to Mittal in 2005.

Severstal officials, some of whom visited Sparrows Point last week, say they plan to increase production at the plant to full capacity of 3.6 million tons a year. Mittal has used it as a swing plant, with output fluctuating with market forces.

Severstal has said it sees the Sparrows Point acquisition as key to helping it expand its footprint in the United States. The company said it would complement its other U.S. properties, which include the former Rouge Steel plant in Dearborn, Mich., and SeverCorr in Columbia, Miss.