Nippon Steel completed its purchase of U.S. Steel on Wednesday, June 18, placing two Iron Range mines under new ownership with some oversight from the federal government under a national security pact.
The deal includes a “golden share” that gives President Donald J. Trump and future administrations an ability to block certain actions and some leverage to enforce promises made by the Japanese steelmaker.
In practice, the arrangement is a permanent single share of preferred stock in U.S. Steel that allows the president or a designee to effectively serve on the company’s board.
As part of the pact, a number of potential activities by the company are disallowed without approval of the president, ranging from moving its headquarters to following through on investments.
For the Iron Range, the deal intends to send about $800 million in investments to U.S. Steel mines between 2025 and 2028 as part of a larger promise to spend $11 billion domestically. That total also calls for construction of a new $1 billion mini mill at an undetermined location.
Nippon is set to spend $200 million in 2025 and 2026, and $300 million in 2027 and 2028 at the company’s Minntac and Keetac facilities, subject to approvals and permits, according to SEC filings.
No details have been provided on the scope of those local investments, and a spokesperson for U.S. Rep. Pete Stauber told Iron Range Today recently that particulars were still unknown.
The United Steelworkers (USW) have been the biggest opponent of the merger since it was announced in December 2023, and supported U.S. Steel rival Cleveland-Cliffs to acquire the company.
Union officials were miffed that the company didn’t consult with them before agreeing to the Nippon Steel sale, and have sought written assurances from the new parent company that would protect contracts, jobs and retiree benefits.
Nippon has said it would honor current collective bargaining agreements with USW, which are set to expire next year, but little-to-no language concerning workers and jobs was present in the national security pact publicized Wednesday.
The deal calls for the company to maintain base salaries of current employees until 2030, and is meant to safeguard against plant closures, idles or sales up to June 18, 2035, including at Minntac and Keetac.
But it also carved out an exception for temporary plant idles, which typically include layoffs and a more open-ended timeline than the term implies.
That’s the current case at two Cliffs facilities on the Iron Range. The company announced temporary idles in March, impacting 630 miners at Hibbing Taconite and Minorca Mine.
Company officials anticipated a six-month down period, but union leaders have expressed concern over the winterizing process at Minorca — calling it instead an “indefinite idle” period, and whether the full workforce at HibTac will ever return.
USW President Dave McCall said Wednesday that union would work to hold Nippon responsible to its promises.
“Our current agreement expires in September 2026,” he said, “and rest assured, if our job security, pensions, retiree health care or other hard-earned benefits are threatened, we are ready to respond with the full strength and solidarity of our membership.”
More broadly, the Keetac and Minntac facilities would stand to benefit from a cash infusion.
Keetac recently finalized upgrades to produce of DR-grade pellets to feed electric-arc furnaces, and was reportedly a facility of interest for Nippon from the start. It also faces a large unknown with its water permits and state sulfate standards, which could present a significant cost hurdle.
Minntac also has permit renewals on the horizon, as well as general maintenance at the largest taconite mine in the United States.
Nippon will also have to navigate a 25% ownership stake in Minntac by Cliffs, stemming from a pandemic-era decision by U.S. Steel to sell part of the mine to Stelco in 2020. Terms of the deal appear to allow the company a clean out in 2027, but at a cost of $120 million. Stelco was purchased by Cliffs last year.