Cleveland-Cliffs Selected to Receive $575 Million in US Department of Energy Investments for Two Projects to Accelerate Industrial Decarbonization Technologies - Seite 2

This investment will secure 2,500 jobs at Middletown Works, where the unionized workforce is represented by the International Association of Machinists (IAM). The flex-fuel DRI plant and EMFs will require 170 additional jobs. The project will result in 1,200 building trades jobs during peak construction.

As the DRI facility can be fed with standard, blast-furnace grade pellets, the project will take full advantage of the Company’s United Steelworkers (USW) represented iron ore mining and pelletizing units. The new configuration also avoids the use of significant amounts of prime scrap metal, which Cliffs anticipates will become shorter in supply and higher in cost throughout the rest of the decade. The process will also allow Cliffs to maintain the level of quality of the steel produced, which would otherwise be degraded with increased scrap usage, maintaining the Company’s leading position in the automotive end market.

The net capital outlay for Cliffs will be approximately $1.3 billion, net of capital avoidance on the existing blast furnace and coke plants, over a 5-year period primarily starting in 2025 and expected to conclude by 2029. Cliffs’ portion will be funded using liquidity on hand and its own free cash flow generation. The Middletown site offers enough available space to construct the new facility without encumbering the existing processes, effectively eliminating interference risks during the construction and commissioning phase. Cliffs thanks both Midrex and Hatch for their collaboration in developing the initial planning for this transformational project.

The Company does not anticipate any material capital spending related to this project to occur in 2024 and maintains its current capital expenditures outlook for this year, reiterating its capital allocation priorities currently focused on executing more aggressive share buybacks.

Butler Works Induction Reheat Furnaces (up to $75 million grant)

If awarded, Cliffs would also replace two of its existing natural-gas fired high-temperature slab reheat furnaces at Butler Works in Butler, Pennsylvania with four Electrified Induction Slab Reheat Furnaces, to bring optimum efficiency to its production of electrical steels, a critical component of the electrification of America and the greening of the electrical grid.