Russian-based steel producer EVRAZ has started the process of selling its North American properties, but business is “full steam ahead” at the Rocky Mountain Steel Mill in Pueblo where staff are making steel for rail products and a $50 million new long rail mill is being built.
“Nothing changes. We are not going anywhere,” said Annie Stefanec, a Chicago-based spokesperson for EVRAZ North America.
“We are still hiring, still going to career fairs and full steam ahead with producing steel for rail products,” in Pueblo, Stefanec said of the company, which employs 1,100 Pueblo workers.
London, England-based EVRAZ PLC announced Wednesday that it is starting the process of soliciting proposals for the acquisition of its North American subsidiaries, according to a news release. “The sale will allow (the company) to unlock the stand-alone value of the North America business.”
The company does not yet have a buyer.
The Pueblo mill has been a part of EVRAZ North America since it was purchased in 2007 and has not been impacted by sanctions that were placed on EVRAZ PLC by the United Kingdom in May as a response to Russia’s invasion of Ukraine. The U.K. froze assets for several individuals suspected of financially aiding Russian President Vladimir Putin.
Those sanctioned included Roman Abramovich, a Russian billionaire who owns more than 28% of EVRAZ PLC's total shares.
Pueblo authorities react to proposed EVRAZ sale
“It is a strange geopolitical time right now,” said Jeff Shaw, president of Pueblo Economic Development Corp. “I don’t think we are surprised,” that the North American portion of the company will be sold.
Pueblo Mayor Nick Gradisar told The Chieftain that the sale of the company's North American assets was "going to work to the long-term benefit of Pueblo and the employees of EVRAZ" as Russia's war in Ukraine continues.
The steel industry has been intertwined with Pueblo's prospects for 150 years, Gradisar said, but "it's not the driver of the community it once was." As the city's economy has diversified, the "fortunes of the community" are no longer directly tied to the ups and downs of the steel mill.
"The steel mill here in Pueblo has been owned by several owners throughout its existence, but whoever owns it in the future will have a huge asset as a premier steel mill in North America," Gradisar said in a statement. "We know the investments with the long rail plans for the future and the best steel workers in North America here in Pueblo make this an attractive investment for a company looking to make this acquisition.”
Shaw agreed with Gradisar.
“We are not worried about it. We’ve been through previous ownership changes with the mill during rockier times in the steel industry and right now it is a profitable and successful plant, so I imagine it would be attractive to somebody,” Shaw said.
“They have a great product, a great workforce and whoever buys it is going to have a well-run organization, so we are optimistic about it. We will see if a new owner surfaces,” Shaw said.
Chuck Perko, president of United Steel Workers Local 3267, who represents 150 people in the quality, technical and plant protection areas of the mill, said his union is in contract negotiations with EVRAZ. The United Steelworkers 2102, which represents another 750 workers, also is in negotiations with the company.
"Our current contract has the most iron-clad successorship clause that there is in a contract," Perko said. "It basically says if the company is sold the new owner will agree to recognize the union, recognize the old contract and bargain in good faith at such time for a new contract."
More EVRAZ news:Pueblo's EVRAZ steel mill starts $500 million expansion project
Perko said the current contract expires in September. He believes an ideal scenario would be "spinning us off as a new company with the same headquarters (in Chicago) since we've demonstrated for the better part of a year that we can run on our own resources and assets. But I don't think that is their intent."
Long rail mill construction continues
The potential sale also is not impacting the construction of the new long rail mill. Construction on the state-of-the art, half-mile long rail building has employed hundreds of builders since the company broke ground on the project in July 2021.
The new mill will incorporate 7,000 tons of steel, 52,000 yards of concrete and 5 million pounds of rebar “made here in Pueblo,” said David Ferryman, EVRAZ senior vice president for the Pueblo business unit at EVRAZ North America.
The new long rail mill “is 35% complete and should start production of the first long rail by the end of 2023," Stefanec said.
EVRAZ North America has six production sites including its location in Pueblo, one in Portland, Oregon, and four in Canada, according to the company’s website. The North American subsidiary operates as an independent business in the U.S. and Canada in all areas, including procurement of raw materials, operating production facilities and corporate financing, Stefanec said.
Tracy Harmon can be reached at firstname.lastname@example.org or on Twitter @tracywumps. Anna Lynn Winfrey can be reached by email at email@example.com or on Twitter @annalynnfrey.
This article originally appeared on The Pueblo Chieftain: EVRAZ steel mill sale could 'work to the benefit' of Pueblo