-- U.S. Steel Corp. (X) agreed with Slovakia to keep its operations running in the central European country for at least five years after the government offered incentives to stay.
The largest steel producer in the U.S. won’t sell its Slovak unit, one of the largest employers in the eastern euro- area member, in exchange for environmental and energy-related concessions from the administration, Slovak Premier Robert Fico told reporters. The government earlier today signed an agreement with the company specifying conditions for its staying.
“This moment is extremely important for the whole country,” Fico told reporters in Kosice, eastern Slovakia, where the plant is located. “The government wants U.S. Steel to continue operations and it understands that steelmaking has to have a favorable environment here.”
U.S. Steel said in November it was considering selling the unit after it received unspecified offers. Concern that the sale would lead to job losses at a time when unemployment hovers close to a nine-year high prompted Fico to offer concessions to avert the exit.
The plant is the steelmaker’s sole operation in Europe, where slowing demand is weighing on prices and shipments. Last year, it sold its Serbian mill for $1, triggering a $450 million charge.
The company has also pledged to maintain employment at the unit, while the government will change legislation, which will allow U.S. Steel to draw about 14 million euros ($18 million) a year in subsidies for using renewable energy sources, Fico said. The company will be also granted unspecified environmental concessions.
U.S. Steel bought its Slovak operations in 2000 for $475 million. The plant, with an annual capacity of 5 million tons, has two coke batteries, three blast furnaces and units that produce sheets, tin-mill products and pipes.
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