The project will replace outdated facilities at the Edgar Thomson plant at the Mon Valley Works, Japan’s largest steelmaker said in a statement on Friday. The investment will increase annual production capacity from around 2.2 million tons to 3.5 million tons, with commercial operations expected to begin in the second half of 2029.

US Steel had said in June that investments to upgrade Mon Valley could total as much as US$2.5 billion. The jump reflects rising materials prices and a more accurate assessment of the project’s costs, said a spokesperson for Nippon Steel.

US Steel has become increasingly important to the Japanese firm after being acquired last year. In August, Nippon Steel raised its profit outlook for its American unit in the 2026 financial year by 80% from an initial forecast in May, reflecting a stronger US market. 

“US Steel has become the key earnings driver of our group,” chief financial officer Takahiko Iwai said at the time.

The investment plan helped seal approval for the acquisition after an increasingly politicised review process that drew scrutiny from the White House.

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