Reintegrating

AK Steel gets back into coal and iron ore mining:

To hedge against the up and down market prices of raw materials, AK Steel made a pair of multimillion acquisitions in coal and iron ore interests back in October 2011.
Plans are for AK Steel's coal and iron ore supply chains to be 50 percent vertically integrated by 2015 — so in the future AK Steel will buy half its steelmaking materials and produce the other half itself.
"Together, Magnetation and AK Coal Resources will enhance the long-term profitability of AK Steel in a meaningful way," AK Steel spokesman Barry Racey said.
The cost benefits can't come soon enough. AK Steel had four consecutive years of financial losses netting a more than $1 billion loss in 2012.
In light of worldwide natural disasters, labor strikes and other events, vertical integration of supply chains is a hot business topic, said Susanna Sterling-Bodnar, outgoing president of the Council of Supply Chain Management Professionals, Cincinnati Roundtable....
To that end, AK Steel bought in 2011 all the stock of Solar Fuel Company Inc., which controlled estimated reserves of more than 20 million short tons of metallurgical coal in Somerset County, Penn. The company was renamed AK Coal Resources Inc. and is a subsidiary of AK Steel Holding Corp.
Metallurgical coal is used to make fuel for blast furnaces, the hot part of a steel mill where iron ore is converted to molten metal.
In 2012, AK Steel also bought a coal preparation plant in Somerset County, which cleans and processes coal for shipment, Racey said....
At the same time AK Steel announced its 2011 investment to buy a coal company, the Butler County steelmaker also said it formed a joint venture with Minnesota company Magnetation Inc. to produce iron ore concentrate. The joint venture, called Magnetation LLC, is close to construction on a plant in Indiana to make pellets from the concentrate. James Wainscott, AK Steel CEO, told investors in April that Magnetation has obtained the needed environmental permit from Indiana to start construction.
Once the pellet plant is fully up and running, Magnetation LLC expects to produce 3 million tons of pellets a year for AK Steel's use and for sale to outside companies. There are concentrate plants already running.

I've featured Magnetation here and here.  They are reprocessing tailings piles in the Iron Range.  It's funny how business trends go back and forth over the years.  Vertical integration was all the rage at the turn of the 20th century, then it was considered passe.  Now it's back.