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Cleveland-Cliffs (CLF) to Set Up Transformer Plant in Weirton

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Cleveland-Cliffs Inc. (CLF - Free Report) stated that it will establish a new electrical distribution transformer production plant in Weirton, WV. This strategic investment aims to alleviate the significant shortage of distribution transformers that is currently hindering economic growth across the United States.

Cleveland-Cliffs will repurpose its Half Moon Warehouse in Weirton to produce three-phase distribution transformers, which are used in electric power distribution systems. The total capital investment for this project is $150 million, with $50 million to be provided by the state of West Virginia through a forgivable loan. The plant is expected to begin operations in the first half of 2026. The U.S. Department of Energy’s recent efficiency standards for distribution transformers support the long-term viability of this investment by promoting the use of highly efficient American-made Grain Oriented Electrical Steel (GOES).

This investment will create reemployment opportunities for 600 USW-represented workers from the idled Weirton tinplate mill. The new plant will increase demand for American-made GOES, which is produced exclusively by Cleveland-Cliffs in the United States at its Butler Works steel mill in Butler, PA. This is expected to lead to increased GOES production at Butler Works, offering potential employment growth for the UAW-represented workforce in Butler. The Weirton plant will also utilize stainless and carbon steel produced by Cleveland-Cliffs’ facilities in Ohio, Michigan and Indiana.

 

Cleveland-Cliffs underscored the crucial role of distribution transformers in maintaining and expanding America’s electric grid. The company noted that the shortage of transformers, exacerbated by the growing adoption of Artificial Intelligence across various sectors, will significantly increase electricity consumption. CLF's vision for Weirton is to develop a center of excellence for transformer manufacturing, providing well-paying, middle-class jobs to skilled workers and supporting the country’s electrical infrastructure needs.

The company also highlighted Weirton's growth potential, citing its existing infrastructure and highly trained workforce. Cleveland-Cliffs expressed gratitude to the governor justice for advancing this critical project and to the West Virginia Department of Economic Development for the $50 million forgivable loan. The company also acknowledged the support from the Weirton community and regional officials.

United Steelworkers praised the investment, stating that it would provide significant employment opportunities for skilled Steelworkers. It emphasized that the new plant will build on Weirton’s proud steelmaking legacy and establish the region as a manufacturing hub for transformers critical to U.S. economic and national security.

Shares of CLF are down 9.7% in the past year compared with a 7.9% fall in its industry.

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Zacks Rank & Key Picks

Cleveland-Cliffs currently carries a Zacks Rank #4 (Sell).

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