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Cleveland-Cliffs Spent $100M on Plant as Atonement for Previous Owner's Violations

A 2015 settlement called for a civil penalty of about $1.3 million.

Editor's Note: This article has been updated to reflect the fact that Cleveland-Cliffs has already spent $100 million on a new electrostatic precipitator (ESP) for its facility in Dearborn, Michigan.

Steelmaker Cleveland-Cliffs faced costly modifications to an eight-year-old consent decree that was supposed to address air emissions at the company’s manufacturing plant in Dearborn, Michigan.

The consent decree involved the U.S. government, the state of Michigan and AK Steel, which Cleveland-Cliffs acquired in 2020. It required AK Steel to implement specific measures to tackle the plant’s visible air emissions. However, these actions did not elevate the plant to full Clean Air Act compliance. 

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The original settlement with the U.S. and the Michigan Department of Environmental Quality called for AK Steel to pay a civil penalty of about $1.3 million and send $337,000 to nearby schools for an air filtration system. As a result, Cleveland-Cliffs undertook further extensive measures with an expected cost of more than $100 million.

According to the Department of Justice and the EPA, the new measures are expected to reduce the plant’s visible emissions and minimize emissions of lead and manganese. 

The modification required the replacement of the plant's electrostatic precipitator (ESP). This device removes particulate matter from exhaust gases produced during the plant’s operations. The modification also required regular testing of the new ESP, specific operational parameters and continuous monitoring for visible emissions.

The DOJ stated that Cleveland-Cliffs had already executed much of the required modifications in anticipation of the agreement.

According to Patricia Persico, the senior director of corporate communications at Cleveland-Cliffs, the company already spent more than $100 million for the Dearborn plant's new ESP. Persico added that the work was completed in March and that the new pollution control device is performing as expected.

"This issue began when AK Steel was the owner and operator of the Dearborn facility," Persico said. "Under Cleveland-Cliffs stewardship, the company proactively worked to rebuild the pollution control devices since taking ownership of the Dearborn facility in 2020."

In addition to the modification costs, Cleveland-Cliffs must pay a civil penalty of more than $81,000 to Michigan for violating the state permit’s opacity, lead and manganese restrictions. The company will also spend $244,000 on a state-law supplemental environmental project that will provide nearby residents with home air purifiers.

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