Cliffs working on a transforming solution for Weirton mill

Imported transformers pose a potential security threat to this country because “we don’t even know what’s inside,” Goncalves said during an earnings conference call on Tuesday. He said more transformers needed to be built in the US for that reason.

There is also is pent-up demand for transformers, Goncalves said. And demand is only expected to grow as a result of a new DOE transformer efficiency standard that ensures GOES and not a substitute material is used to produce transformers domestically.

“We are working on a solution for Weirton that will resolve a lot of the situation with the transformers,” Goncalves said on the call. That solution will also require more of the grain-oriented electrical steel (GOES) produced at the Butler mill.

“We want to put up a new factory in Weirton, W.Va., using our workforce there to produce transformers,” he explained. “We can co-invest; we can just support with the steel. We can do whatever it takes, but we need to increase the throughput and the availability of transformers for the supply chain.”

A spokesperson for Cliffs did not return an SMU request for more information.

“We expect to see significant investment from our customers on this important piece of infrastructure,” Goncalves said. He noted that Cliffs also has available GOES capacity at its Butler and Zanesville, Ohio.

The US Department of Energy recently selected Cliffs’ Butler Works to receive a $75 million grant to enhance the production of GOES, reduce emissions, and improve productivity.

Additionally, Cliffs has completed a $30-million upgrade at its plant in Zanesville. That work doubled its annual capacity for producing non-oriented electrical steel (NOES) to 140,000 short tons.

CFO and EVP Celso Goncalves said on Tuesday’s call that Cliffs is continuing to develop applications for NOES, mainly with automotive clients. He noted the company has “no intention to expand beyond what we already have for NOES.”