Cleveland-Cliffs Inc. (CLF) shares surged 7.68% to $11.56 on Friday after the company detailed a major investment at its Middletown Works facility in Ohio. The stock extended strong intraday gains and briefly approached the $12 level during the session before easing slightly from its high. The move followed new federal support for a $1 billion modernization project at the steel plant, with Cleveland-Cliffs and the U.S. Department of Energy each contributing $500 million.

Under the plan, the Middletown Works upgrades will target efficiency, reliability, and lower operating costs. The company expects the project to preserve about 2,300 existing jobs, employ more than 1,500 construction workers during its busiest period, and complete a blast furnace rebuild by early 2030.

DOE Rescopes $500 Million Grant

Cleveland-Cliffs said the U.S. Department of Energy established a framework covering the Middletown Works investment. The framework allows both parties to finalize negotiations and implementation plans under a previously awarded $500 million grant. Cleveland-Cliffs will match the federal funding, bringing the project's planned investment to $1 billion.

That grant was originally awarded under the Energy Department's Industrial Demonstrations Program, which funds projects aimed at reducing emissions from heavy industry, and had initially been tied to earlier plans for hydrogen-based steelmaking at the site. Under the rescoped framework, the federal funds will instead support upgrading the plant's existing blast furnace operation, consistent with the company's plan to maintain current steelmaking capacity.

The company expects to deploy the funding over the next four years without interrupting steel production. Work is scheduled to begin within the coming weeks as the company starts several major facility improvements. Cleveland-Cliffs plans to complete the blast furnace rebuild during the first quarter of 2030.

Shares responded strongly after the company outlined the scale and funding structure of the project. CLF climbed 7.68% to $11.56 as trading momentum strengthened during the session, and the stock moved near $12 before easing from its intraday high.

Middletown Works Upgrade Targets Efficiency and Lower Costs

The investment will include upgrades to the facility's blast furnace and material handling infrastructure. Cleveland-Cliffs also plans to install artificial intelligence-based process control systems across parts of the steelmaking operation. These improvements aim to raise productivity while supporting more reliable production at the facility.

The project will also include a new cogeneration facility designed to use gas produced by the blast furnace. That facility will generate electricity and steam for use inside the Middletown Works complex. As a result, Cleveland-Cliffs expects lower external electricity demand and improved energy efficiency across the site.

Middletown Works currently produces about three million tons of raw steel annually. The facility specializes in automotive-grade steel used for exposed vehicle components, including cars, trucks, and sport utility vehicles. Cleveland-Cliffs plans to maintain existing steelmaking capacity while improving reliability, efficiency, and operating costs at the plant.

Federal Support Strengthens Ohio Operations

Vice President J.D. Vance plans to visit Middletown Works in Middletown, Ohio, as the investment moves forward. Energy Secretary Christopher Wright will also participate, alongside federal and state officials from Ohio. The administration plans to highlight domestic manufacturing and steel production during the visit.

Cleveland-Cliffs expects the project to preserve about 2,300 existing jobs at Middletown Works. Construction activity could also support more than 1,500 workers during the project's busiest period. Local union building trades are expected to participate in the construction and modernization work.

The project follows broader efforts to strengthen domestic steel production and reduce dependence on imported industrial materials. Middletown Works became part of Cleveland-Cliffs through its 2020 acquisition of AK Steel, a deal that, combined with the purchase of ArcelorMittal USA that same year, transformed the company from a primarily iron ore-focused producer into one of North America's largest flat-rolled steelmakers. Cleveland-Cliffs operates major steelmaking assets serving automotive manufacturers and other industrial customers across North America. With the Middletown investment, the company now has a multi-year plan to improve one of its largest automotive steel facilities.

Source: CoinCentral