WEST CHESTER, Ohio (AP) -- AK Steel Holding Corp. said Tuesday that it will permanently shutter its Ashland, Ky., coke plant by the second quarter of 2011 in a cost-cutting move that will affect 263 workers.
The plant produces the blast furnace fuel for the company's iron- and steelmaking facility. AK Steel has said it intends to produce more of the raw materials it consumes. Still, the company said it decided to close the plant after heightened maintenance costs and environmental regulation made the plant less cost-efficient than others that AK Steel runs.
"While it is the goal of AK Steel to be more self-sufficient in steelmaking raw materials, further operation of the Ashland Coke Plant is not in the best interests of the company and its shareholders," the company said in a statement. AK Steel added that not having the overhead of running the facility would allow it to pour more resources into another local plant, called Ashland Works, which employs 900 workers.
The company said it will try to reassign the 263 affected workers within Ashland or to plants in other regions. AK Steel's other facilities are primarily located in Pennsylvania and Ohio.
AK Steel expects to book an $80 million pretax charge on the closure, most of which will be reflected in the company's 2010 fourth-quarter results. Approximately $50 million of this charge will include write-offs of property, equipment and the plant itself. The remainder will result in cash payments made over several years, including about $18 million in employment costs and $12 million in closure costs.
Shares of the West Chester, Ohio company rose 16 cents to $16.59 in morning trading.