Dear stakeholders,
For the past 11 years, ArcelorMittal has published an annual sustainability report detailing our United States operations, our people and our communities. The report is based on ambitious goals we have set to improve our performance as a sustainable company and maintain our license to operate. As a global company, we are not required to publicly report at the national level, however we choose to do so because it is the right thing to do. We are driven by our stakeholders, including our customers, investors, communities and our employees, to uphold our transparency and accountability.
Looking back at 2019 and ahead to the remainder of 2020, it has been, and will likely continue to be, a challenging time. This applies not only to our company, but also to the steel industry as a whole in the United States. Through this difficult period, our commitment to sustainability, our stakeholders and our communities has not wavered. We know that steel has an essential role to play in a sustainable and resilient future for society due to its continuous recyclability and its contributions to products that will support a net zero carbon economy. We also know that steelmaking comes with a unique and complex set of challenges and that we must continually strive to do better. Thus, I welcome the opportunity to share both our successes and opportunities with you in our 2019 United States Integrated Report.
2019 was a difficult financial year for our business in the United States. Factors that contributed to this include a sizable disconnect between the overall economy and the market demand for steel products, a decrease in apparent steel consumption and lower demand across many major steel-consuming sectors. These issues, when combined with a sub-optimal pricing environment, set the stage for a challenging economic period.
However, there are still bright spots to our 2019 financial story. The Section 232 trade measures continued to reduce steel imports. Finished steel imports declined by more than 18% in 2019. In addition to maintaining good cost control, ArcelorMittal USA made meaningful improvements in some key delivery performance operating parameters, reducing both our internal rejects and additional processing.
There were many advances to our sustainability story as well. In 2019, ArcelorMittal globally invested $301 million toward research and development efforts with the goal of inventing smarter steels for a better world. Our scientists and engineers are creating steels that are stronger, lighter and more efficient than ever before. ArcelorMittal also became the first steel company to launch a Climate Action report detailing our carbon reduction ambitions for the company across the world.
ArcelorMittal USA spent $347 million in capex in 2019, investing in projects that support our efforts to be efficient and sustainable. These projects included enhancements at our plants to produce new grades of advanced high-strength steels for automotive customers, which offer significant vehicle weight reductions without compromising strength or safety. Energy efficiency capex investments were also made, including the multi-year Burns Harbor powerhouse rebuild which will enable the integrated steelmaking facility to generate and reuse enough energy to feed 75% of the plant’s total power requirements. We also continued our partnership with the U.S. Department of Energy in the Better Buildings, Better Plants Program to reduce our overall energy consumption.
That is not to say that we did not have setbacks. Sustainability challenges in 2019 included a decline in year-over-year employee safety performance, which is inexcusable. The company also experienced a failure at a pump station at our Burns Harbor, Indiana facility, resulting our reporting water permit exceedances, which in turn generated significant stakeholder concern. These matters are further detailed in the report. I take both issues very seriously and am committed to ensuring that health, safety and environmental compliance are top priorities for the company.
Looking forward to 2020, we know that this will be a challenging time for our industry and our communities. More than ever I am dedicated to upholding ArcelorMittal’s 10 sustainable development outcomes throughout our operations in the United States. We must not lose sight of our goals to provide safe, healthy, quality working lives for our people, be an active and welcomed member of the community and use our natural resources responsibly.
I am personally grateful to our employees for their extraordinary efforts to advance our work in 2019, and their resolve to continue working safely as an essential business during the COVID-19 crisis of 2020. Our employees have transitioned to new working protocols and environments while adapting to an unprecedented level of societal and personal uncertainty. They are truly our greatest asset, and while we face challenges to come in 2020, I am confident we will overcome them together as we always have. And together, we will continue on our journey to be the most sustainable steel company in the world.
John Brett
President and CEO
ArcelorMittal USA
