Pueblo steel rail contract secures 7-year Union Pacific deal

The Pueblo steel rail contract sets out a new long-term agreement between Rocky Mountain Steel Mills in Pueblo and Union Pacific Railroad. The deal covers domestic steel rail production and brings the companies’ legal dispute to an end. This is reported by the railway transport news portal Railway Supply.

The deal runs for seven years. It links Union Pacific with the only remaining dedicated rail production facility in the United States. In a Rocky Mountain Steel Mills news release, the company said the contract reflects Union Pacific’s commitment “to buying the majority of its rail from a United States manufacturer,” continuing a relationship that dates back to the early 1890s.

Pueblo steel rail contract and legal dispute settlement

The agreement also resolves the pending legal issues between the two companies. As reported by Trains, Union Pacific has withdrawn its earlier lawsuit in Nebraska. The railroad said Rocky Mountain Steel broke long-term supply agreements. It said the company would not ship more rail unless Union Pacific accepted a 61% price increase. Still, Rocky Mountain Steel argued that the increase was a long-overdue adjustment to market pricing.

Meanwhile, a similar lawsuit filed by BNSF Railway against Rocky Mountain Steel in Texas is still pending.

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Union Pacific CEO Jim Vena said in the release: “We appreciate the longstanding relationship with Rocky Mountain Steel, its dedicated workforce and their collective commitment to domestic steel manufacturing. The new long-rail mill is a significant step forward in American manufacturing that supports Union Pacific’s focus on delivering safe, reliable service for our customers,”

Long rail mill backed by $1 billion investment

Rocky Mountain Steel said the new long rail mill is expected to begin operating this year. The company said its new long rail mill was “constructed with a more than $1 billion investment in domestic steel production.”

The contract comes as the company prepares to start the facility this year.

Construction on the long rail mill project broke ground in July 2021. The release states: “The new mill will ensure Pueblo will remain the only dedicated steel rail mill in the United States, operating one of the most advanced rail production lines in the world,”

Separately, Doug Matthews, CEO of Rocky Mountain Steel Mills’ parent company, Orion Steel, said the new contract “reinforces the one-of-a-kind partnership” that has “been benefiting American workers every day” since the 1890s.

Matthews also said: “This mill is an essential part of America’s steel transportation infrastructure, and its continued existence shows that our nation offers railroads large and small the very best product, made by the very best steelmakers in the world,”

100-meter premium rail for major railroads

When the new long rail mill opens, it will produce 100-meter lengths of premium rail. The release said those lengths require 80% fewer welds than standard 80-foot rails. They improve track safety and reliability for major railroads.

The mill is powered by an 1,800-acre solar farm. It is the world’s largest solar-powered steel mill.

Also, Connecticut-based Atlas Holdings completed its purchase of Pueblo’s steel mill in August 2025. It then formed Orion Steel Companies to oversee the local mill. That company also oversees the Oregon Steel Mill in Portland and Canadian steel assets formerly owned by Evraz North America.

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