U.S. Steel eyeing completion of coke substitute project

Officials from United States Steel Corp. affirmed that modules expected to make an alternative to the steelmaking input coke will start production in Gary this year.

During a conference call with analysts Jan. 31, John Surma, U.S. Steel chairman and CEO, said the project at Gary Works and its Mon Valley Works coke battery project in Clairton, Pa., would come online this year with full production starting in 2013.

The modules in Gary could begin operating in a limited capacity as early as the second quarter.

Carbonyx Inc. owns the technology U.S. Steel is licensing to use in Gary. The two carbon alloy substitute production modules in Gary could produce up to 500,000 tons of a coal-based product per year and Clairton could produce about 1 million tons of coke per year. U.S. Steel said in 2010 the project carried a price tag of more than $220 million.

"Right now, if it works as planned, we hope it's going to be a great thing," said Jerry Littles, president of United Steelworkers Local 1014 in Gary.

Littles said a team from Gary went to Oklahoma to work at the Carbonyx's pilot operation and better understand how to make it work in Northwest Indiana. He estimated about 450 people worked in coke operations late last year and about 80 would be transferred to work on the Carbonyx operation.

The integrated steelmaking complex in Gary still has three functioning coke batteries, which are groups of ovens that bake coal to drive off impurities to produce a product that feeds blast furnaces.

Company officials said the modules in Gary can produce a coke alternative from different types of coal and once fully operational, will result in a net reduction of airborne pollutants the facility creates from the coking process.

The Indiana Department of Environmental Management permitted U.S. Steel to build four modules in Gary, but the company is constructing two in the current project phase. The company has yet to reveal whether it will build the next two modules. At full production, the modules would substitute about 20 percent of Gary Works' coke requirements.

Surma said he didn't anticipate the company needing to buy coke from the merchant market this year and its production facilities should produce adequate supplies.