Cleveland-Cliffs Coal Project

Vice President J.D. Vance is in his Ohio hometown to promote the Trump administration's economic agenda, visiting a factory that will now focus on coal. The Cleveland-Cliffs steel plant was awarded up to $500 million in 2024 as part of the Department of Energy's Industrial Demonstrations Program.

The funding for the project survived the Trump administration's cancellations of federal awards, and will now be used for state-of-the-art upgrades to the blast furnace and advanced material handling infrastructure. According to the company, the project will replace the inner lining of an old industrial furnace and add a cogeneration unit that makes electricity and steam from waste gas.

Project Details

The total cost of the project is slated to be $1 billion, with the government matching the company's investment. The project was originally intended to replace one of seven blast furnaces with new, cleaner equipment that uses natural gas and eventually hydrogen to make iron, and then electric furnaces to turn it into steel.

Original Goals

The original project aimed to reduce around one million tons of greenhouse gas emissions annually and create 170 new permanent jobs and up to 1,200 construction jobs. However, the company has now backed away from its green steel ambitions, and the project will instead focus on upgrading the existing blast furnace.

Controversy

The decision to use the funding for a coal project has been criticized by Georgetown University law and economics professor David Super, who claims that it is wildly illegal. According to Super, Congress required the funds to be used for projects involving renewable energy sources or reducing carbon emissions, and diverting the funds to continue a coal-burning furnace is a misuse of taxpayer funds.

The plan, if approved by state regulators, would likely lock the mill into using coal for the next several decades, thanks to high costs and long lead times. CEO Lourenco Goncalves has stated that the project is a testament to the importance of preserving the blast furnace route to produce automotive-exposed grade steels in the U.S. The project's future is uncertain, with potential legal challenges looming over the use of taxpayer funds.