The EVRAZ steel mill in Pueblo is, so far, weathering economic sanctions on Russian oligarch Roman Abramovich, who owns a 28.64 percent stake of the mill's parent company, EVRAZ plc.
EVRAZ North America (ENA), headquartered in Chicago, operates the Pueblo mill, which recycles scrap metal into train rails, pipe and other products. But it is part of a global corporation that's seen its stock value plummet and sanctions levied against Abramovich after Russia invaded Ukraine last month. The parent company's stock has also been suspended from trading on London’s FTSE exchange and recently saw its nearly $19 million payment on a bond blocked.
Tatiana Bailey, an economist with the University of Colorado Colorado Springs, said while nobody can predict how long the crisis will last, the turmoil may affect the company’s ability to do business.
“EVRAZ is a big enough player that it's causing a little bit of uncertainty across the entire steel industry,” she said.
Bailey said however, if the Pueblo mill can keep producing steel products, it’s likely there’s a market for them.
“The supply chains are already in a lot of upheaval,” due to the pandemic and other factors, Bailey said. “So if they have a steady supply of steel, I don't think what's happening with this particular company is necessarily going to have an impact on their (customers') buying decisions.”
Pueblo Mayor Nick Gradisar said in a recent statement that he’s monitoring the situation. “It is not likely that any sanctions against the shareholders of EVRAZ plc would affect the operations of the Pueblo plant,” he said.
A statement from the company said, “ENA operates independently in the United States and Canada, in all areas, including procurement of raw materials, operating production facilities and corporate financing. In the United States and in Canada, we represent domestic industry. We produce steel with American and Canadian workers, supporting the American and Canadian economies. Our facilities are ingrained in the local communities in which they operate.”
In 2020, EVRAZ accepted $15 million dollars and other incentives to build a new long rail mill currently under construction at the Pueblo location. The funds come from the City of Pueblo’s half cent sales tax designated for economic development. In exchange, the company agreed to build the mill and maintain about 1,000 full-time jobs in the city. A giant solar array designed to power the new mill was recently completed.
Pueblo Economic Development Corporation CEO and president Jeff Shaw said at this time, he has no concerns about EVRAZ holding up its end of the bargain and to his knowledge, construction is continuing as planned.
“Our biggest concern is obviously the employees and making sure that we do everything positive we can do to make sure the new mill gets built and gets built on time,” Shaw said.
The steel mill has a long history of booms and busts in Pueblo, beginning in the late 1800s, as it produced rails to build the Denver and Rio Grande Railroad. It became part of the Colorado Fuel and Iron Company and during the first half of the 20th century it grew to be the state’s largest private employer, with some 12,000 workers in its sprawling steel and mining operations.
EVRAZ acquired the Pueblo mill in 2007. The year prior, Abramovich purchased a 41% stake in EVRAZ Group SA for an estimated $3 billion, according to the Wall Street Journal.
The company also has scrap metal recycling facilities in Colorado Springs and Denver.
Editor's note: This story has been updated for clarification purposes.
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- Colorado companies are pulling out of Russia as sanctions and the invasion of Ukraine deepen
- Boomtimes And Long Declines Shadow Pueblo’s Most Iconic Industry
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