Can a Steel Mill Become an AI Data Center?

A closed industrial site comes with something an AI developer cannot buy quickly: a connection to the high-voltage grid. That is the pitch behind a wave of proposals to turn idle steel mills, aluminum smelters and retired power plants into data center campuses. In July 2025, Cleveland-Cliffs chief financial officer Celso Goncalves told analysts the company was exploring sales of idled mills, including to data center developers, because the sites offer access to power and water with the infrastructure already in place. Since then the idea has moved from an earnings call to signed deals, a federal guidance document and a long run of zoning hearings. This piece asks three questions: is it a good idea, has it worked, and are there better options. The reporting reviewed here points to an uneven answer. The conversions furthest along are aluminum smelters and power plants. The steel mills are, so far, proposals.

What the old site is selling

EPA's January 2026 guidance on redeveloping Superfund and brownfield sites as AI data centers says such sites may be strong candidates because of their preexisting infrastructure, likely industrial zoning and proximity to energy lines. It also lists what a site needs: typically at least 100 acres for a 100-megawatt campus, enough grid capacity and substation access with redundancy, a reliable water source, redundant fiber, and a cleanup status compatible with construction. For a brownfield, a state regulator's “No Further Action” letter may be required. The guidance adds that construction takes thousands of workers while operations need a small number of skilled staff. The cases below test that list.

The furthest along is a smelter in Kentucky

Century Aluminum shut its Hawesville smelter in 2022 because of high energy costs, a closure that cost about 600 jobs, according to WKU Public Radio. TeraWulf closed on the site in February 2026. Data Center Frontier reports it paid $200 million in cash plus a 6.8% interest in the development subsidiary, about $301.9 million in all. The smelter reportedly drew about 480 megawatts around the clock. The property has multiple high-voltage lines, an energized on-site substation and more than 250 buildable acres. TeraWulf's chief operating and technology officer, Nazar Khan, said the site “already had five independent transmission lines for redundancy.”

About five months after closing, TeraWulf announced a 20-year lease with Anthropic for roughly 401 megawatts of critical IT capacity, worth an estimated $19 billion. The campus has access to up to 480 megawatts of gross capacity, so the old smelter load and the new data center load are close in size. First capacity is due in the second half of 2027, with the full amount by early 2028. Nothing is operating yet. Data Center Frontier notes that the schedule leaves little room for delay in transformers, chillers and backup power, and that the $19 billion headline works out to roughly $950 million a year on a simple average, with actual revenue depending on phased rent starts. Local officials hope the project will offset the lost jobs; WKU Public Radio noted that data centers typically employ fewer than 100 people.

Other smelters show the limits

Alcoa shut its Massena East smelter in New York in 2014. On October 15, 2026, the company disclosed a definitive agreement to sell about 1,300 acres for a data center, for up to $315 million: $50 million to $65 million at closing, and $60 million to $250 million more tied to permitted data center capacity over as many as seven years. Alcoa has not confirmed the buyer. The price is a ceiling, not a figure. The site's interconnection historically supported about 435 megawatts of smelting load, while the proposed three-building campus would draw about 635 megawatts and need a new 200-megawatt substation, according to the county planning director, who has questioned where the power would come from. The developer has no power purchase agreement with the New York Power Authority. Data centers are not yet a permitted use in the town's industrial zone, and an earlier town revision meant to allow them in industrial zones was never officially approved.

Water is a second question there. At a May county planning board review, the application described about 2.7 million gallons a day withdrawn from the river for evaporative cooling, with about 1.6 million gallons a day lost to evaporation, and a planner said staff were told the applicant would not use a closed-loop system. The board chair raised groundwater concerns because of contaminated landfills already on the property.

In Maryland, the 2,100-acre former Alcoa Eastalco site shows how long a conversion can take even with an industrial pedigree. The plant opened in 1969 and closed permanently in 2010, and groundwater contamination had been found there in 1983. Quantum Loophole and TPG Real Estate bought it in 2021, and the planned power demand across the campus is about 2,400 megawatts, including 260 megawatts for Aligned and 300 megawatts for Amazon Web Services. Aligned, AWS and Rowan have all broken ground. Even so, a June 2026 tally by the environmental group Nature Forward found none of the data centers operating, and a referendum petition against the county's data center overlay zone drew more than 21,000 signatures.

The steel mills: proposals, not buildings

In the reporting reviewed for this piece, no AI-scale data center was operating on a former steel mill site. The steel projects sit at the zoning, cleanup and utility-study stage.

Alton, Illinois, is the newest. Alton Steel, which operated its mill for more than a century, ceased operations in January 2026. On October 21, developer TerraWatt proposed the Riverbend Technology Center on the 381-acre site: a $3 billion first block of 200 megawatts, growing to as much as 1 gigawatt in 200-megawatt steps. The first phase would demolish 1.26 million square feet of mill buildings. The 200-megawatt block is sized to what the mill used to draw, about 160 megawatts according to consultant Cecilia Dvorak, who called 200 megawatts roughly what Ameren Illinois could deliver in the short term. She described the full buildout as a “chicken and egg” problem. Cleanup is expected to be extensive, with scrap and slag piles and regulated materials that may include chromium, lead, manganese, mercury, nickel and zinc, and a 2023 environmental assessment needs updating before costs can be set. TerraWatt says it will pay for the cleanup. No formal permit or zoning application has been filed, and the contingent purchase agreement, which TerraWatt expects to close in 2027, depends on rezoning and an Ameren Illinois study. Alton Steel chief executive Chris Ervin said: “It's not a done deal.”

In Kentucky, Rubix Data Centers, part of Spain's Submer Group, has proposed a 2-gigawatt campus on roughly 500 acres of the former AK Steel Ashland Works, spread across Russell, Boyd County and Ashland. The company plans closed-loop cooling and about 200 full-time jobs. It also faces moratoria: Russell has a six-month pause that the company wants lifted, Boyd County finalized a 180-day pause, and Ashland's was set to end in August, according to The Daily Independent in July.

In Pennsylvania, developer Brian O'Neill wants a 2-million-square-foot data center in ten existing buildings on 66 acres at the Cleveland-Cliffs mill in Conshohocken, with natural gas generation on site. Plymouth Township's planning board unanimously refused to recommend it in October 2025. The zoning hearing board met on August 6, 2026, in a session the Philadelphia Inquirer described as raucous, and made no ruling; the hearing was expected to resume in September. In Gibraltar, Michigan, Raeden proposed reusing buildings at the former McLouth Steel plant for a 100-megawatt inference data center. The city approved a 12-month moratorium, and Raeden and the property owner sued in federal court, saying the pause unlawfully stopped their application.

Is it a good idea?

The numbers in these cases point to the main limit. The two aluminum smelters carried about 435 and 480 megawatts, which is close to the size of an AI campus. The one steel mill with a published figure, Alton, used about 160 megawatts, and its developer is planning in blocks because that is what the utility can deliver. A mill's historic draw records what the site once used, not what the utility will supply today. As Dvorak put it, final capacity depends on what the utility can realistically provide. Seen this way, an old connection is a down payment on the power supply, not the whole thing. Massena would need a new substation and a power contract, and Ashland's 2 gigawatts is far beyond any mill's past load.

Cleanup is the least visible cost. EPA's guidance warns that redeveloping contaminated sites may carry federal liability for contamination, with protections for buyers who complete the required inquiries and follow continuing obligations, while state programs set standards for brownfields. Alton's cost cannot be set until an assessment is updated, and Massena's board chair pointed to landfills already on site. Jobs and politics matter too. A mill that once employed hundreds is replaced by a facility that needs a small operating staff, and every steel proposal above has met a moratorium, a zoning dispute or organized neighbors, or still faces a permit it has not yet filed. On this evidence, the idea works best for sites that come with a large, still-valid grid connection, workable zoning and a cleanup that is finished or fundable, and works poorly when the old load is small or the permits are far off.

Has it been done? An older precedent

Conversions are not new, only newly large. By July 2015, Keystone NAP was serving customers from a 180,000-square-foot building that was once part of U.S. Steel's Fairless Hills operation in Pennsylvania, using the site's existing electrical infrastructure and a nearby microgrid. At that time it had 13 megawatts of capacity to the building, expandable to 30, according to Data Center Frontier. That is a fraction of the campuses above, and its record since then is outside this piece.

Are there better options?

The retired power plant is the other template. In April 2025, Homer City Redevelopment and Kiewit announced a gas-fired campus on the site of Pennsylvania's 1,884-megawatt Homer City coal plant, which closed in mid-2023. The 3,200-acre site has interconnections to the PJM and New York grids and sits about five miles from a major gas pipeline. The plan calls for up to 4.5 gigawatts of generation and a $10 billion first investment. FracTracker, which visited on April 1, 2026, reported that developers had announced the start of vertical construction alongside demolition at the old plant. The coverage reviewed named no tenant.

Federal land is another. On July 29, 2026, the Department of Energy announced a $100 billion campus at the former Paducah Gaseous Diffusion Plant in Kentucky, which closed in 2013. Brookfield would develop and operate a 1.8-gigawatt data center on about 600 leased acres, with NextEra building a gas plant of about 2 gigawatts and up to 2.6 gigawatts of battery storage. First components could arrive in 2028 and construction would finish in 2031, but the Kentucky Public Service Commission still has to approve the power service agreement, and DOE cleanup of the plant is expected to run through 2065.

What these sites share is not steel. It is a large, energized connection, a single seller, enough acreage and, at Homer City, its own fuel supply. By that measure, the better options are the sites that bring more of those traits: retired power plants with generation and fuel, smelters whose load matches an AI campus, and federal land under one owner. A steel mill is a good candidate when it has them and a poor one when it does not. The sources reviewed do not offer a head-to-head cost comparison with new greenfield sites. Data Center Frontier says existing connections can shorten utility interconnection waits that often delay new campuses by years, which is the case for the old sites.

What to watch

Hawesville's first capacity is due in the second half of 2027, an early test of an AI lease on a former industrial site. In Alton, watch whether a rezoning request is filed and what the Ameren Illinois study finds. Massena's zoning and its power contract will decide whether the $315 million ceiling is reached, with closing expected within six months of the October 15 disclosure. Conshohocken's zoning hearing board, Gibraltar's lawsuit and the moratoria around Ashland will show how much local politics, not the old power lines, decides which mills become data centers.