It’s the highest-cost coke AK makes or purchases, Alan McCoy, vice president of government and public relations, said of the Ashland coke plant that will close in the second quarter of next year. McCoy said AK faced as much as $50 million over several years to meet environmental regulations for the coke plant.
“The idea of contemplating adding $50 million over the next couple years would make that problem worse,” he said. “It would jeopardize the competitiveness of Ashland Works and its 900 jobs.”
Alternate sources of the raw ingredient have been secured in the short term to supply iron and steel production at Ashland Works, which employs approximately 900 people.
“We were expecting some kind of announcement because we knew there were some kind of issues,” said Barry Webb, a plant repairman welder and financial secretary for United Steelworkers Local 523. But the plant closing was unexpected, he said.
The union has 247 members who work full-time at the coke plant, Webb said.
A Jan. 6 meeting is scheduled with AK officials to discuss details such as language in the union contract about preferential hiring if positions are available at other plants, he said.
“The economy in this area is slow. I think there will be difficulty finding jobs of this quality,” Webb said, adding that coke plant jobs averaged in the $20 per hour range.
In addition to increasing maintenance costs, the benchmark costs of iron ore, a key raw material, has increased more than 98 percent this year, McCoy said. Plus, AK Steel advanced a planned maintenance outage of the Ashland Works’ blast furnace to the third quarter that, along with rising raw materials costs, were major factors in its $59.2 million third-quarter loss, according to the company.
Meanwhile, construction of the Middletown SunCoke Energy plant continues. AK Steel has inked deals with SunCoke to buy metallurgical coke produced once the Middletown Coke Co. opens next year; and in September 2009 with its Haverhill North Coke Co. in Franklin Furnace. But together, McCoy said those two plants won’t cover all of AK’s coke needs in a strong market.
AK has seven steel facilities and also makes coke in Middletown.
Contact this reporter at (513) 705-2551 or clevingston@coxohio.com.
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