Cleveland-Cliffs will build a new electrical distribution transformer production plant in Weirton, West Virginia. This downstream direct investment by Cleveland-Cliffs in Weirton will address the critical shortage of distribution transformers across the United States.

Cleveland-Cliffs will repurpose its Half Moon Warehouse in Weirton to commence production of three-phase distribution transformers used in electric power distribution systems. The total capital investment is $150 million, of which $50 million will be granted by the state of West Virginia to Cliffs through a forgivable loan.

Cliffs expects the new plant to come online in the first half of 2026. The efficiency standards for distribution transformers recently promulgated by the US Department of Energy (earlier post) support the long-term utilization of highly-efficient American-made Grain Oriented Electrical Steel (GOES), ensuring the viability of this investment in Weirton.

This investment will result in reemployment opportunities for 600 USW-represented workers from the indefinitely idled Weirton tinplate mill. The new electrical transformer plant will also generate additional demand for American-made GOES, exclusively produced in the United States by Cleveland-Cliffs, at its Butler Works steel mill in Butler, Pennsylvania.

Additional demand for GOES will ultimately result in additional production of GOES at Butler Works, generating the opportunity of employment expansion for the UAW-represented workforce in Butler, Pennsylvania.

In addition to Cliffs’ GOES, the new transformer plant in West Virginia will also consume stainless and carbon steel produced by Cliffs in several other of its steel plants in Ohio, Michigan and Indiana.

Distribution transformers are critical to the maintenance and expansion of America’s electric grid. These transformers are in short supply, and that shortage stifles economic growth across the country. The shortage will continue to be exacerbated by the widespread adoption of Artificial Intelligence in virtually all sectors of the economy, which will exponentially increase the consumption of electricity, in the United States and worldwide. Said another way, there will be no AI without electricity, and there will be no electricity without transformers. Our vision for Weirton is to develop a first-of-a-kind center of excellence for transformer manufacturing that will provide good paying, middle class jobs to skilled workers, and will service our country’s electrical infrastructure needs.

—Lourenco Goncalves, Cleveland-Cliffs' Chairman, President and CEO

The commercial electrical steel market is divided in two major categories: grain-oriented electrical steel (GOES) market and the non-oriented electrical steel (NOES) market. GOES is used in static machinery such as transformers, which require unidirectional magnetization, while NOES is used in rotating machinery such as motors and generators, which require multidirectional magnetization.

Carmakers have an obvious direct exposure to NOES, but they are indirectly also exposed to GOES, which is critical to support the rollout of EV charging infrastructure.