One of Pueblo’s biggest employers, Evraz Plc, is looking to get out of North America, which includes ending its ownership in steel mills in the city.
The company is one of Russia’s largest steel and mining companies and acquired Pueblo’s mill in 2007. But since Russia invaded Ukraine in February, the company has come under scrutiny by the U.S. and NATO. On Wednesday, it said it would solicit “proposals for the acquisition of its North American subsidiaries” because a sale would allow it “to unlock the stand-alone value of the North America business.”
The London-based company said it would not comment further. Its Evraz North American operations, which includes locations in Canada, produces steel for rail lines and the energy, industrial and construction markets.
The news, while abrupt, wasn’t unexpected, said Jeff Shaw, president and CEO of the Pueblo Economic Development Corp. Evraz had given them the heads up.
“All I know really is that they just put it out there that they’ll entertain offers, that there’s no buyer in place. They don’t have anybody identified,” Shaw said.
Since the February invasion, Evraz has been scrutinized for its links to Russia. An investor included billionaire Roman Abramovich, a Russian oligarch. Abramovich resigned from Evraz’s board in March.
In May, the company said it was sanctioned by the U.K.’s Secretary of State for Foreign, Commonwealth and Development Affairs. It was allowed to continue business operations in North America but no U.K. citizen or company could do business with Evraz, Bloomberg News reported.
In July, the company issued a press release denying that it supplied products to the Russian military or products that were used for military purposes.
“Suggestions about potential use of Evraz’s steel, vanadium and other products for military purposes indicate not only the misunderstanding of steel industry’s base principles, but the lack of knowledge about Evraz’s product range as well,” the company said in a statement.
But by then, Pueblo’s economic development team was already discussing what could happen, Shaw said.
“It’s been a conversation for a while so I’m not really surprised by it,” he said. “Ever since the war in Ukraine started, there’s been questions over Evraz and the ownership group and what they produce, where they sell and what they don’t do.”
Shaw hopes that if the sale goes through, a new employer will replace Evraz and continue operating in town. Evraz employs more than 1,000 people in the city and has been expanding.
Last year, the company broke ground on a $500 million long rail mill that would employ 300 people, The Pueblo Chieftain reported. The project had also received a tax credit incentive of up to $2.8 million if it added 205 net new jobs over eight years, according to the Colorado Department of Economic Development and International Trade.
In December, a massive joint solar project among Evraz, Xcel Energy and Lightsource BP, called the Bighorn Solar project, now powers the mill, making it the largest solar-powered steel production facility in the world, according to a previous Colorado Sun story.
“It’s a considerable economic driver for the community,” Shaw said. “We evaluated (Evraz) when we did the expansion project, which is an expansion of the rail mill that is under construction right now. The steel mill has been one of the backbones of Pueblo for 100 years. It certainly is not like it was 40 years ago or 50 years ago, but it’s important to Pueblo so much that the community invested a tremendous amount of resources in their expansion. It’s important not just for the resources or what they provide, but most importantly for the workforce that is out there.”
According to the Evraz statement on exploring a sale, the solicitation process is being conducted by the U.K.’s Office of Financial Sanctions Implementation and any sale would be subject to regulations and sanction laws. The company also said it “does not plan to receive any income” in 2022 from its North American operations.