USX Proposal to Sell Derelict Steel Mill to Iraq Draws Fire

Steel and oil giant USX Corp. has stirred up this area by planning to sell a shutdown steel mill to the government of Iraq, which wants to dismantle it and ship it home to build pipes for irrigation and oil production.

The company first announced that it was negotiating the sale in late July and opposition has been growing. USX has not said how much money it is asking for the plant, but there have been reports that Iraq has offered $100 million.

Rep. Jack Fields (R-Tex.), whose district includes this coastal community, is leading the opposition, asserting that it would cause the loss of U.S. jobs and steelmaking capacity. Fields said Friday that he will try to postpone the sale while the Reagan Administration reviews the deal’s impact on U.S. steelmaking capacity and on national security.

However, the proposed purchase appears to raise no national security questions, a Commerce Department official said Friday. “The technology is very old, very outmoded,” the official said, adding that department officials “don’t anticipate any national security issues to be involved.” The official spoke on condition he not be identified.

The plant, which once employed as many as 2,000 people, was shut down two years ago amid labor turmoil and declining demand for steel. The plant had produced up to 1.3 million tons a year of large-diameter pipe. Fields has said that at least two U.S. companies are interested in the plant and that he believes they are willing to offer USX as good an offer as Iraq.