Point nearer restart

Blast furnace output may resume Friday

July 15, 2006|By ALLISON CONNOLLY | ALLISON CONNOLLY,SUN REPORTER

The blast furnace at the Sparrows Point steel mill should be back up and running by Friday, officials from parent company Mittal Steel Co. NV said yesterday.

The giant furnace, which makes the molten iron that is mixed with scrap metal to produce steel, has been down since June 23, when lightning struck an electrical substation and cut power to the plant. The three-hour outage allowed the furnace - which normally operates at more than 3,000 degrees F. - to cool, causing the liquid metal on its walls to solidify and create slag.

When operators fired up the furnace after the power returned, the slag knocked out one of the nozzles that blasts heat into the furnace.

Without the ability to make steel, the plant has been unable to make tin or steel coils for customers. As a result, about 150 of the plant's nearly 2,500 workers began voluntary layoffs last week.

Mittal officials said yesterday that the outage will cost the company 250,000 tons of iron-making, nearly a month's work. The loss should be covered by insurance, said Bill Brake, Mittal's executive vice president of operations.

"We are working closely with customers to make sure that we respond to their needs as we begin filling orders again and that we compensate as much as possible for the production shortfalls related to this incident," Brake said in a statement.

John Cirri, president of United Steelworkers Local 9477, which represents production workers at Sparrows Point, said the technicians have been making progress and that slag is still flowing out of the furnace. He called the startup date an "estimate."

"Everybody over there has been doing whatever's necessary to get this furnace up and healthy again," Cirri said yesterday.

The furnace mishap comes as Sparrows Point's parent company, Mittal, attempts to merge with Luxembourg-based Arcelor SA to create the world's largest steelmaker by a factor of five. Mittal may sell Sparrows Point to avoid antitrust issues.

To appease regulators, Mittal has promised to sell Canadian steelmaker Dofasco, a unit of Arcelor, to German-owned ThyssenKrupp AG. However, Arcelor refuses to approve Dofasco's sale, despite signing a merger agreement with Mittal.

In one of a series of defensive moves to fend off Mittal's advances during a nearly six-month takeover bid, Arcelor transferred ownership of Dofasco to a Dutch foundation. The bylaws of the foundation block any sale without Arcelor's permission. Arcelor will have a majority stake in the combined company, to be called Arcelor Mittal.

Justice Department officials have said that if Mittal is unable to sell Dofasco, it must divest itself of equivalent assets.

Sparrows Point officials confirmed that representatives from ThyssenKrupp toured the Baltimore County plant in late May and expressed interest.

Mittal's $32 billion offer for Arcelor closed Thursday. It needs to gain control of 50 percent of Arcelor's shares for its takeover to succeed. By Wednesday, Mittal said it had won 18 percent of Arcelor, but officials expected most shareholders to tender their equity around the deadline. Mittal will publish the results of the offer later this month.

allison.connolly@baltsun.com

The Associated Press contributed to this article.

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