U. S. Steel Announces Update on Metallics Strategy

New Production of Direct Reduced (DR)-grade Pellets

U. S. Steel plans to break ground in Fall 2022 at one of its two Minnesota Ore Operations facilities, Keetac or Minntac, to construct a system dedicated to producing DR-grade pellets. This will enable one of the Company’s existing pelletizing plants to not only create DR-grade pellets but also maintain the optionality to continue producing blast furnace-grade pellets.

The Company does not expect the approximately $150 million DR-grade pellet investment to change the 2022 capital spending budget and will continue to prudently manage future capex in-line with its strategic priorities.

DR-grade pellets are a critical feedstock for ironmaking in a direct reduced iron (DRI) or hot briquetted iron (HBI) process that ultimately supplies EAF steelmaking. Upon completion, the Company would have the option to sell the new pellets to third-party DRI / HBI producers or use them to feed a potential future DRI or HBI facility of its own. The DR-grade pellets produced would be a new product line for U. S. Steel. The investment and expected timeline are subject to state and local support and receipt of regulatory permitting.

Non-Binding Letter of Intent: Progressing towards an agreement for U. S. Steel to supply SunCoke with iron ore to produce pig iron

U. S. Steel signed a Non-Binding Letter of Intent with SunCoke Energy, Inc., a raw material processing and handling company, setting forth the preliminary terms for a potential arrangement under which SunCoke would acquire the two blast furnaces at Granite City Works and build a 2 million ton granulated pig iron production facility. Upon completion of the proposed facility, SunCoke would supply U. S. Steel access to 100% of the pig iron production for the next ten years.

U. S. Steel intends to supply the needed iron ore to be used to produce the pig iron. Because the iron ore would come from U. S. Steel’s own mines, the Company would realize a significant cost advantage. This pig iron could be used by EAFs and is expected to supply U. S. Steel’s growing fleet of EAFs.

The proposed transaction is contingent upon several conditions, including the negotiation and execution of a definitive agreement, approval by the U. S. Steel Board of Directors, and receipt of all appropriate regulatory approvals. There can be no assurance as to the final terms of the proposed transaction, that the conditions will be satisfied, or that the proposed transaction will be completed.