Integrated steelmaker US Steel bought nearly half of upstart electric arc furnace (EAF) steelmaker Big River Steel, with an option to acquire the entire company.

The 49.9pc stake bought by Pennsylvania-based US Steel is valued at $700mn, putting the value of the entire Big River Steel operation, which operates a 1.65mn st/yr EAF in Arkansas, at more than $2.3bn, according to statements today from both companies.

The purchase gives US Steel the option to purchase the remaining 50.1pc stake in Big River Steel, which is currently in the midst of doubling its production to 3.3mn st/yr. Funds have already been raised for the Big River Steel expansion, which is under construction and expected to be completed by late 2020.

While US Steel does not operate any EAF mills, the company is currently building an EAF at its Fairfield Works in Alabama, where costs have risen to $280mn from an initial cost of $215mn.

US Steel said it could achieve $1bn in capital and operational cash improvements by 2022 by reassessing its investments in asset revitalization, among other savings. The company said in August 2018 that it would spend $2bn on a company-wide asset revitalization program.

US Steel restarted two blast furnaces at its Granite City Works in Illinois in 2018 in response to the protectionist Section 232 tariffs implemented by the Trump Administration, which imposed a 25pc tariff on steel imports. The restarted blast furnaces had been idled in late 2015.

US Steel has announced several investments in 2019, including the $1.2bn investment in its Mon Valley Works near Pittsburgh to install a new endless casting and rolling facility at its Edgar Thompson Plant and a cogeneration facility at its Clairton coke plant.