But "it became increasingly more apparent" that E2 couldn't pull together the financing and never reached the necessary agreement with the United Steelworkers, according to a court filing last month by the Justice Department's trustee, Joseph G. Krauss. At Krauss' direction, ArcelorMittal canceled the deal, putting Sparrows Point back on the market.
Severstal - the name means "Northern Steel" in Russian - is fighting for a place in the newly globalized steel world. It is big - it had revenue of $15.2 billion in 2007 - and getting bigger - revenue and profit were up about 22.5 percent last year from 2006. It owns a mining division and controlling interest in an Italian-French iron and steel company, Grupo Lucchini. But Severstal is still only one-seventh the size of ArcelorMittal.
"Severstal has a good reputation," said Mark Reutter, author of Making Steel, a book about Sparrows Point. Severstal's principal owner, Alexei Mordashov, has a background in steel, as opposed to Ross and Mittal, who functioned more as financiers, Reutter added. "He puts money into his mills," Reutter said.
Mason said Severstal was interested in expanding its American production because "domestic supplies can't fill the demand" here. At the same time, he said, the falling value of the dollar and the cost of transportation have made importing steel to the United States too expensive.
Severstal expects the deal to close during the next three months, and Mason said he didn't anticipate either of the problems that sank the E2 sale - lack of agreement with the union and difficulty in arranging financing.
"If we wish to borrow, we can borrow," Mason said. And if the company decides to pay cash, with nearly $2 billion in cash on its balance sheet, "We wouldn't have any problem."
Tom Russo, the plant's general manager, noted with some surprise that yesterday's price tag was far below what E2 said it would pay last year. But some analysts said E2's bid was too high, which may have contributed to its failure to close the deal.
And the price of critical raw materials - chiefly iron ore and metallurgical coal - have soared during the past 12 months, hurting the prospects of plants such as Sparrows Point. Such costs - combined with the slowing U.S. economy - factor in to the plant's worth, analysts said.