Kaiser Steel

The Kaiser Steel Corporation was incorporated on December 1, 1941. Steel was needed to supply the various shipbuilding facilities controlled by Henry J. Kaiser on the west coast. At their inception, these facilities began building 30 Ocean ships for the British government in the spring of 1941 and were using costly eastern steel, expensive to transport under normal circumstances and due to the war in ever shorter supply. After obtaining the US$125 million (US$2.24 billion in 2022 dollars[3]) needed, construction of the mill in Fontana, California, began. Although the government provided a large portion of the capital, this was a loan, and unlike for example the Geneva plant (which was privatized after the war) the Kaiser Co. owned Fontana from the start.[4] This was not the preference of Kaiser though. In 1947 appeals to at least reduce the debt burden to the government after U.S. Steel purchased the Geneva mill in the post-war surplus market under favorable conditions remained unsuccessful.[5] In August 1943, the first plate steel rolled off the production line and was worked into the hull of the SS Richard Moczkowski, launched August 22[6] from the Richmond No. 2 yard.[7] The majority of plates was delivered to the California Shipbuilding yard on Terminal Island, a mere 50 miles from the Fontana mill and of such proportions that it could soak them all up.[8]

Wartime production totaled 1,209,000 tons of steel ingots. from which were made 547,000 tons of plate for 230 ships, 135,000 tons of shapes, 94,000 tons of 155mm, 90mm and 8-inch shell forgings, 17,000 tons of bars and in 1943, 155,000 tons of Lend-Lease steel ingots delivered to Britain. Fontana productivity during war exceeded Geneva's, despite the other plants much larger size, but due to the latter's later completion date.[9]

But from the beginning, the plant had to deal with two major hardships: its location (55 miles (89 km) inland, a wartime concession to fears of coastal attacks) and size (restricted to wartime needs by government lenders).[1]

At the time of construction open hearth furnaces were chosen as technology. Additional ones were added in 1949 and 1953. From 1958–1959 at a cost higher than the original plant the existing 9 furnaces were augmented by 3 basic oxygen furnaces while doubling the steel production capacity to nearly 3 million tons.

During the Korean War the steel production increased again, but in the 1970s Kaiser Steel was losing out against the cheap imports from Japanese and Korean steelmakers.[10]

In the early 1960s, the Kaiser Steel Corp. began shipping iron ore to Japan. A 10-year, 10 million tons contract with the Mitsubishi Shoji Kaisha trading company representing Japanese steel producers was closed in 1961 for non-pelletized beneficiated ore (fine grinding and magnetic separation) and in November 1963 augmented with an additional 6-year, 6 million tons contract for pelletized ore. Three 58,000 ton bulk carriers were scheduled to start shipment from California in late 1965. In April 1964 another 4.8 million tons over 6 years with Motsubishi International brought the total in pellets to 10.8 million tons over 6 years with an option of 18 million tons over 10 years. The source of the ore was the Eagle Mountain mine (i.e. unrelated to the Australian mining operation). The 5 Japanese steel works involved in the deal were: Yawata Iron & Steel Co. (Sakai), Fuji Iron & Steel Co. (Muroran), Nippon Kokan K. K. (Kawasaki), Sumitomo Metal Industries Ltd. (Wakayama) and Nisshin Steel Works Ltd (Kure).[11][12][13] The 1961 10 million ton contract together with a similar agreement with the Standard Slag Company for shipment of 4 million tons over 10 years from their Minnesota mine in Nevada via Stockton had a value of $140,000,000, i.e. a price per ton in the neighborhood of $10.[14]

In the early 1970s, Kaiser contemplated getting out of manufacturing basic steel slabs, but in 1975 the company reversed course, and instead spent US$287 million (US$1.16 billion in 2022 dollars[3]) to modernize the facility.[1] When the new mill went online in 1979, it was capable of producing 2.3 million tons of high-grade carbon steel a year. But the new plant couldn't hold off the international competition, environmental regulations, labor disputes and corporate raiders.[10]

In November 1981 it was announced that Kaiser would shut down over a period of several years all steelmaking operations at Fontana, including coke oven and blast furnace operations and mining at Eagle Mountain. This shutdown was expected to cost at least $150 million. The company had earned profits in the first 3 quarters of 1981, but this was after 18 straight quarters of pre-tax losses. Fabrication rather than steelmaking was the major profit contributor.[15] In December 1983, the mill was shuttered as part of the general termination of Kaiser's steel business.[1]

Coal for this early production came from Utah Fuel Company Mine No. 2 at Sunnyside, Utah at the mouth of Whitmore Canyon[16] (39.55521°N 110.37909°W / 39.55521; -110.37909 (Sunnyside coal mine)), just a few miles from the Geneva and Columbia mines (the only other blast furnace operators on the Pacific Coast). In 1950, Kaiser Steel purchased the entire Sunnyside, Utah facility. In July 1955, Kaiser purchased 202,950 acres of land and mining rights on another 326,854 acres near Raton, New Mexico (36°53′49″N 104°26′24″W) for $3,500,000, at a time when the company mined 1,500,000 tons per year in Utah (feeding 3 operating blast furnaces) and Utah reserves were estimated to last 70 years at that rate.[17] The new source of coal was to augment the Sunnyside mine, not replace it.[18] In Raton, the existing mine, named the Koehler Mine, was operated and upgraded until the newer and more modern York Canyon Mine was completed nearby. The York Canyon Mine served as the major source of coking coal until the plant closed. The distance of the Fontana mill from these coal sources suitable for blast furnace operation gives an indication for why the steel industry in the Far West has always been of relatively little importance. More than one ton of coal has to be shipped for each ton of steel produced in a mill.

Also needed for the production of steel was limestone. Until 1955, this material was purchased from various sources in California and Nevada. In that year Kaiser Steel purchased (simultaneously with the coal at Raton) a large deposit located in Cushenbury, California (34°21′14″N 116°51′30″W), only 75 miles (121 km) from Fontana.[19]

The last ingredient needed for the steelmaking process was a reliable source of iron ore. Kaiser Steel purchased the Vulcan Mine located near Kelso, California (35°0′45″N 115°39′13″W), which served as the primary source of ore until 1948. This ore, however, was not of good enough quality to satisfy Kaiser and a better source was sought. In 1944, Kaiser Steel purchased the large Eagle Mountain mining claim from the Southern Pacific Railroad and began the development of the Eagle Mountain Mine (33°51′27″N 115°29′14″W). First test charging of the blast furnace with the new ore was conducted in June 1947.[20] The new 52-mile Eagle Mountain Railroad connecting to the Southern Pacific main line for another 101 miles to Fontana was complete after 11 month of work on July 29, 1948 at a cost of $3,800,000.[21] In 1963 Kaiser Steel became 40% co-owner of Hamerslay Iron Pty, Ltd. and thus gained access to Western Australian iron ore deposits.[22] This part of Kaiser Steel business was highly profitable, but in June 1979 the 28.3% ownership share was sold to Conzinc Riotinto for $207.5 million, bringing Riotinto's share to 54%. The reason for the sale was speculated by The Iron Age to be due to debt incurred for the latest $233 million modernization program at Fontana.[23] The contribution to Fontana operations was probably very small, given that Kaiser was shipping iron ore From California to Japan. But it was not zero.[23] Perhaps the pellet plant at Eagle Moutain was too big for the mine.

Total ton-miles to assemble raw materials for one ton of pig iron and ship one ton of steel from producing centers to Pacific Coast (1943, J.R. Mahoney, University of Utah). 1 mile of rail assumed equivalent to 9.4 miles of waterway.[24] The last column covers only raw materials to illustrate the cost of delivery to a customer in the steel works own area of operation.

The initial first stage construction encompassed a plant on 1300 acres. The main constituent facilities were[25]

Four miles southwest of Fontana was a government-owned and Kaiser operated ordnance forging plant on a 48 acre tract with 207,500sqft under roof. Principle equipment of forging presses, plus annealing and machining equipment.[26]

In January 1949, Consolidated Western Steel was contracted to build blast furnace #2 (1200 ton/day). Consolidated was also main contractor for the original blast furnace built in 1942. After expansion the plant was expected to produce 876,000 tons (=365*2*1200) of pig iron per year.[27] "Bess No. 2" was blown in on 13 October 1949.[28] The expansion program included also +45 coke ovens (new total 135 with 515,000 tons/year), open hearth furnace #7, which had begun production already on December 24, 1948, a new strip mill building housing a 60,000 tons/month 4-high 4-stand 86-inch hot strip mill (TBC January 1950), a butt-weld pipe mill, 5 to 14 inches, to be supplied by the new hot strip mill (TBC January 1950),[29] a 25,000 tons/month 10-stand strip mill of sheets up to 16 inches (25,000 tons/month), one small 24-inch cold rolling mill (24,000 tons/year).[30]

The 8th open hearth furnace was completed in May 1951, adding 180,000 tons annual capacity with a new total of 1,380,000. Construction of a 200,000 tons/year 5-stand tin plate mill began in April 1951, part of the same $24,5 million expansion program. The hot rolled sheet for this facility were supplied by the 86-inch hot strip mill.[31] First tin plate was shipped August 5, 1952, 2 month ahead of schedule.[32] The expansion was announced in October 1950, part of a $125,000,000 financing program under which the remaining $91,082,990 government loans were repaid with capital raised through (institutional investors) first mortgage bonds ($60m, 3.75% due in 1970[33]), bank credit ($25m) and stock ($40m). With this, Fontana was then entirely privately financed. The tin plate mill was the second on the Pacific Coast, after Columbia's 1948 opening.[34]

Further expansion announced March 1952: 3rd blast furnace ("438,000 tons/year" (=1200*365) TBC Spring 1953), 9th open hearth (156,000 tons/year, TBC Dec 1952), 90 coke ovens, 2 strip mill stands for the 86-inch strip mill (now 6-stand[lower-alpha 1]).[35] Program cost was $65,000,000. Blast furnace #3 was blown in June 2, 1953.[36]

In February 1955 Kaiser purchased the Union Steel Company plant,[37] which became the Kaiser Steel Fabrication Division plant in Montebello, 7301 Telegraph Road, at the intersection of Interstate 5 and Greenwood Avenue (33.98229°N 118.12930°W / 33.98229; -118.12930 (Montebello Fabrication plant)).[38] Union Steel was founded in 1941 by A. Wyndham Lewis, in 1955 it comprised a site of 16.5 acres with 185,000sqft under roof and was employing 300. Besides usual structural steel fabrication it was also involved in aircraft and missile launcher parts (possibly a Project Nike tier 4 subcontractor, given the proximity to Consolidated Western Steel's Maywood plant).[39]

A new $164,000,000 (estimate adjusted to $214,000,000 in July 1958[40]) expansion plan was announced in the summer of 1957, its main objectives was the doubling of the plant's steel production capacity. This was amidst a market in which the nationwide average of steel production had fallen to 80 percent of capacity, but Fontana running at 100 percent was hoping to replace yet more steel from eastern sources with home-made steel.[41]

• 40 percent increase in iron ore facilities
• 1 new blast furnace, coke ovens from 225 to 315, pig iron from 1,314,000 to 2,121,000 tons
• tin plate increased from 200,000 to 370,000 (this was still far behind Columbia Steel, who had increased cold sheet production to 540,000 tons in 1952 already). New equipment included a pickling line, continuous annealer, temper mill and electrolytic tinning line. Production commenced early June 1958.[42] (presumably there was also a new tandem mill between pickling line and annealer, not mentioned)
• insert before the existing 86-inch strip mill a new 5-stand roughing mill to break down slabs, allowing the strip mill to run independently of the plate mill. the new strip mill was then an 11-stand tandem mill with 3 preheating furnaces, finished in July 1958.[40]
• plate mill converted from 110-inch 3-high to 148-inch 4-high for plates up to 126 inches wide, began production in October 1958[43][44] max pipe diameter from 30 inches to 42 inches
• new 46x90-inch slabbing mill, finished December 1958[45]
• Blast furnace #4 was blown in on January 16, 1959 with capacity increased from 1,314,000 (=365*3*1200) to 1,912,000.[46]
• steel production from 1,536,000 to 2,976,000 tons with the addition of 3 oxygen furnaces, which finished the expansion program when the furnaces started production in early February 1949. Adjacent to the Fontana plant the Linde Co., a division of Union Carbide, more than tripled the capacity of its oxygen production plant to 10,000,000cuft/day. The number of open hearth furnaces at that time was 9 and despite their lower efficiency and approaching obsolescence, they continued at that time to contribute 50% of the steel ingot capacity.[47]

In 1962 Kaiser built ore loading facilities at the Port of Long Beach which could load a batch of 50,000 tons in one day. An additional loading facility for pellets was added in 1964/65 in the Port of Los Angeles to handle one half of the pellet shipments.[12] (Since there is no logistical necessity to load 2 ships on the same day, this must obviously have been driven primarily by storage needs for one load).

In July 1964 design began on enlargement of the Eagle Mountain mine and of beneficiation facilities. The program was expected to be complete in the summer of 1965.[48] The pelletizing plant (with a Dravo-Lurgi traveling grate type machine[49]) capacity was increased during initial construction from 1.1 million to 2 million tons in light of Mitsubishi's increased commitment to buy.[50] The new plant was part of a $119 million dollar expansion program launched in the summer of 1964, which resulted in a total of $400 million spent since 1956 (119+214+65 would equal 400). Other improvements were increase of coal mining in Raton, first production of galvanized sheets, increased output of thin tinplate, modernization and capacity increase of the hot strip finishing mill to meet demand, a third electrolytic tinning line.[51] The pellet plant started production in November 1965.[52]

Aerial site view in 2021. Auto Club Speedway is in the foreground, California Steel Industries is in the distance.

The site and plant were briefly owned by an investor group that purchased much of Kaiser's assets before they were sold to a Kaiser creditor, Brazilian firm Companhia Vale do Rio Doce (now Vale). Vale formed a joint venture with Kawasaki Steel (now JFE Holdings) called California Steel Industries, which paid about US$120 million to purchase the facility and forgave Kaiser's debt as part of the transaction.[10][55]

California Steel would only operate the portion of the plant that where they could process imported steel slabs into finished products such as rolled steel.[1][55][56] The manufacturing equipment for producing raw steel, installed in 1979, would remain idle.[55] In 1994, California Steel struck a deal with China's Shougang (Capital Steel and Iron Corporation) to sell the still relatively modern steel manufacturing equipment for US$15 million (US$29.6 million in 2022 dollars[3]). Shougang would also spend US$400 million (US$790 million in 2022 dollars[3]) to dismantle the equipment, ship it to southern China, and reassemble as one of that country's most advanced steel mills.[10]

After Vale's debt was forgiven, the remaining assets of Kaiser Steel were reorganized into a company called Kaiser Ventures in 1988. In 1990, the company leased the plant's water rights to the Cucamonga County Water District, which provides municipal water in the western portion of San Bernardino County. The ongoing payments allowed the new company to stay in business. The new California Steel plant operated on about 400 acres (160 ha) of the sprawling 1,800-acre (730 ha) site, the remainder of which was owned by Kaiser Ventures. The company demolished the remaining plant, which was built with more steel per square foot than any other building in the country and sell the metal for scrap.[1][10] In 1995, Kaiser Ventures sold off a large portion of the land to create the California Speedway (now called the Auto Club Speedway), a NASCAR-owned motorsport track.

Kaiser Ventures also intended to establish the former mine in Eagle Mountain as a landfill, but when that plan failed, it was sold to Eagle Crest Energy for a hydroelectric project.[57]

Writer Ayn Rand visited Kaiser Steel in October 1947, as part of her research for the novel Atlas Shrugged, a large part of which takes place at the fictional "Rearden Steel". The Journals of Ayn Rand include numerous items on the plant's daily routine, including both detailed technical information on the process of smelting and the terminology involved, for example: "Blast furnaces are usually named after women. The one at Kaiser's is named 'Bess' after Mrs. Kaiser and is referred to by the workers as 'Old Bess'".

The 1952 romance movie Steel Town is set in the fictional Kostane steel works. The mill becomes a major plot element, from the perspective of open hearth furnace workers. The scenes were filmed in Fontana.

Former employees of Kaiser Steel are interviewed in an episode of California's Gold with Huell Howser.[58]

The Fontana site was the location where the steel mill scene was filmed at the end of the 1991 science fiction action film Terminator 2: Judgment Day with the plant recreated as-if in operation by a variety of elaborate special effects, as well as the Outworld scenes for the 1995 movie version of Mortal Kombat. In mid-1985, during principal photograph of A Nightmare on Elm Street 2: Freddy's Revenge, the Fontana steel mill was used to portray the abandoned electricity power plant where Freddy Krueger had taken most of his victims before his earthly death. In 1988, the site was the filming location for the live-action scenes in In the Aftermath. The site was also the location for an underground rave party in 1995 called Stargate, which thousands attended after being shuttled in from a nearby shopping center. The impact of globalization on Kaiser employees was explored in the documentary series Peoples Century.

The company has been mentioned in or the subject of many articles and books. More focused book-length accounts include John Anicic's Kaiser Steel Fontana. In 2011, a book about the rise and fall of Kaiser Steel in Fontana was published. The Steel Works, by Earle Anderson, chronicles his thirty-year career at the mill and his interactions with those who worked there from 1943 to 1984.

The smell emanating from the plant was infamous, although people working in the area became used to it and were unaware. A common expression with school children when someone farted was, "Eew, just like Fontana." In fact, a degradation of the air was noticeable around the plant and would not be allowed by today's standards.[59]

• Richmond Shipyards (37°54′22.3″N 122°21′52.79″W)
• California Shipbuilding (CalShip) (33°45′40″N 118°15′05″W)
• Geneva Steel integrated mill (40°19′N 111°45′W)
• Columbia Steel Company blast furnace est. 1924 (near the Geneva mill)
• Colorado Fuel and Iron closest large integrated steel mill prior to World War II (38.229°N 104.607°W / 38.229; -104.607 (Colorado Fuel & Iron))
• The Forgotten Ore of Eagle Mountain part1 part2
• Steel Production in California (huntleyarchives.com film 16014)

Works cited

• Davis, Mike (1990). "Chapter 7, Junkyard of Dreams". City of Quartz: excavating the future in Los Angeles. London: Verso. ISBN 0-86091-303-1. OCLC 22118422.
• Earle Anderson, Halo Publishing, 2011, "The Steel Works"

• Official website