Slovakia signs deal to have US Steel stay
The Slovak government and U.S. Steel signed a deal Tuesday that will ensure the American company remains the owner of a steel mill employing thousands for at least five more years.
The negotiations between U.S. Steel and the Slovak government have been going on for months. U.S. Steel has reportedly had purchase offers for the mill in the eastern city of Kosice.
"Today, we created conditions to motivate U.S. Steel to stay in Slovakia and continue to produce steel," Slovak Prime Minister Robert Fico said, a day after meeting with U.S. Steel's CEO, John Surma, in Pittsburgh.
U.S. Steel bought the operations in 2000, but Europe's financial troubles have hurt demand for steel and profits at the plant.
The plant, U.S. Steel's last overseas operation, employs about 12,500 people and is a key source of business in eastern Slovakia as well as a major supplier for the country's growing car industry.
The government said the deal covers issues such as energy costs and environment protection but offers no tax breaks. After five years, the two parties will reassess the deal, it said.
The agreement was crucial for the government at a time when the unemployment rate is almost 15 percent in Slovakia.
"The Slovak government is fighting and will be fighting for every single job," Fico said.
U.S. Steel has an annual raw steelmaking capacity of about 29 million tons, with 5 million of that coming from the Kosice plant. Actual production in Kosice was 4.2 million tons in 2011 and 4.4 million tons in 2012.
Early last year, the Serbian government bought a money-losing U.S. Steel plant for the symbolic sum of $1, hoping to keep 5,400 workers employed.