MINEX Forum

Tag: ArcelorMittal

  • ArcelorMittal Secures €1.3bn Grants to Decarbonize German Steel Plants

    ArcelorMittal Secures €1.3bn Grants to Decarbonize German Steel Plants

    ArcelorMittal, Europe’s largest steelmaker, has received approval from the European Commission for €1.3 billion in grants to facilitate the decarbonization of two steel plants in Germany through the use of low-carbon hydrogen.

    The grants, sanctioned by the European Commission, are set to bolster ArcelorMittal’s efforts in transitioning its steel plants in Bremen and Eisenhüttenstadt towards greener practices, with plans to utilize renewable hydrogen exclusively. Despite initial operations relying on natural gas, the plants are slated for a shift towards renewable hydrogen, marking a significant step towards sustainable steel production.

  • ArcelorMittal and French Government Invest €1.8 Billion to Decarbonize Dunkirk Steel Plant

    ArcelorMittal and French Government Invest €1.8 Billion to Decarbonize Dunkirk Steel Plant

    ArcelorMittal SA, the world’s leading steel and mining company, in partnership with the French government, has announced an ambitious €1.8 billion investment to decarbonize its steel plant in Dunkirk, France. The move is a significant stride in the global fight against climate change, poised to reduce France’s industrial carbon emissions by a substantial 6%.

    Investment Details

    The colossal investment will fund the construction of two electric furnaces and a direct reduction plant at the Dunkirk facility. The furnaces will replace existing blast furnaces, drastically reducing the carbon generated by the company’s steel production. The French state’s contribution to this transformative project could amount to as much as €850 million.

    A Strategic Win

    The project is not only a win for the environment but also a strategic triumph for France. The country has successfully secured this major investment in decarbonization from ArcelorMittal, outmaneuvering competing nations such as Belgium, Germany, and Spain. Bruno Le Maire, France’s Finance Minister, emphasized the economic and ecological significance of this investment for France.

    Long-term Nuclear Power Supply Contract

    As part of the initiative, ArcelorMittal also plans to sign a letter of intent with Electricite de France SA (EDF) for a long-term supply contract of nuclear power. This contract will further promote decarbonization efforts, underlining the commitment of both ArcelorMittal and France to create a sustainable future. Le Maire, recently reappointed to his ministerial role with an expanded portfolio that includes energy, is set to visit EDF’s nuclear plant in Gravelines and the Dunkirk steel factory to further champion this investment.

    EDF, a key player in the nuclear energy sector, also has plans for expansion. The company intends to construct two additional reactors at the Gravelines nuclear site, signifying a growing trend towards cleaner, nuclear-powered industrial operations.

    In summary, the substantial investment by ArcelorMittal and the French government in decarbonizing the Dunkirk steel plant is a significant step towards reducing France’s industrial carbon footprint. It reflects the broader efforts by both parties to curb CO2 emissions, demonstrating their commitment to a greener, more sustainable future.

  • How ArcelorMittal is losing its leading position in the global steel market

    How ArcelorMittal is losing its leading position in the global steel market

    In 2022, the company took second place in the ranking of global steel producers. In 2023, Chinese companies are likely to displace ArcelorMittal into third place

    The overcapacity and deteriorating steel market conditions that have been observed since the beginning of Russia’s full-scale invasion of Ukraine have had a negative impact on global steel producers, especially the large ones with plants around the world, including ArcelorMittal.

    Since the bulk of ArcelorMittal’s steelmaking capacity is located in Europe, the war in Ukraine has a significant impact on the company’s production results. Macroeconomic problems, rising production costs along with low demand for finished products and other factors have been negatively affecting the results of the European division for almost two years in a row. In addition, the company’s Ukrainian unit has significantly reduced its capacity utilization during the war.

    In January-September 2023, ArcelorMittal reduced steel production by 3.1% y/y – to 44.4 million tons, and in the third quarter of 2023, it increased by 2% y/y – to 15.2 million tons. This means that the company is unlikely to produce as much steel, as it did in 2022, because  the fourth quarter results are expected to be worse than the third quarter due to production shutdowns and restrictions at some plants in Europe, Africa and Brazil, and the loss of a plant in Kazakhstan.

    In 2022, ArcelorMittal produced 59 million tons of steel, down 14.6% compared to 2021. The company was then ranked second among global steel producers after China Baowu Group (131.8 million tons). China’s Ansteel Group (55.65 million tons) took third place with a small gap. Thus, in 2023 the gap between Ansteel and ArcelorMittal may narrow even further, or the Chinese producer will take second place, as China is gradually increasing steel production in 2023, and production restrictions for the current year have not yet been implemented.

    ArcelorMittal’s results in the fourth quarter of 2023 are likely to deteriorate as the company has been suspending or reducing the use of its European operations, particularly at its plants in Belgium, France, Germany and Bosnia and Herzegovina, since early fall. The suspended capacities include blast furnace (BF) A in Belgium, BF No. 1 in Fos-sur-Mer (France), BF and rolling lines in Zenica (Bosnia and Herzegovina), and a coke oven battery in Krakow. At the plants in Hamburg and Bremen (Germany) and Sosnowiec (Poland), some units are temporarily shut down during the fall and winter periods. The company decided to permanently shut down its pipe division in Poland due to unprofitability.

    ArcelorMittal is also experiencing liquidity problems and is cutting steel production at Acciaierie d’Italia (ADI), the largest and only integrated steel producer in Italy. The company is 62% owned by ArcelorMittal and 38% by Invitalia. Currently, the troubled plant is on the verge of shutting down due to the main shareholder’s unwillingness to invest in its rescue and further development.

    In addition to the European division, the company’s South African and Brazilian assets have been suspended.

    Recently, ArcelorMittal Brasil confirmed that it is temporarily suspending production at three steel mills in southeastern Brazil due to low domestic demand and unprecedented levels of imports. The temporary shutdown affects the plants in Juiz de Fora (a major producer of long products), Piracicaba and Resende, where a “technical” break will be announced until December. This will lead to a drop in steel production in the country by about 1.2 million tons per annum in 2023.

    ArcelorMittal South Africa (AMSA) announced at the end of November that it plans to wind down its long products operations. The decision was driven by weak demand, ongoing infrastructure problems and the worsening power crisis. The move will affect the Newcastle Works, Vereeniging Works and rolling mills that use Newcastle Works products as raw materials.

    In addition, due to the constant accidents with fatalities, the Kazakh authorities decided to terminate investment cooperation with the shareholders of ArcelorMittal Temirtau. By December 2023, the country intends to close the deal to acquire the plant by an unnamed Kazakh investor.

    ArcelorMittal’s Ukrainian unit is currently operating at 30% of capacity and produced 390 thousand tons of steel in the first half of 2023, down 57% y/y. Amid the war, the company is unable to increase production due to the threat of shelling and logistical problems.

    «A few years ago, ArcelorMittal gave up its status as a global leader in terms of production volumes, ceding this position to Chinese companies. Instead, ArcelorMittal has focused on product quality. Reducing production is a logical consequence of this strategy. Moreover, production cuts can be explained now by additional reasons related to the market conditions», said Andriy Glushchenko, GMK Center analyst.

    In January-September 2023, ArcelorMittal’s ACIS segment, which includes plants in Ukraine and Kazakhstan, reduced steel production by 6.8% y/y – to 5.18 million tons.

    Thus, the impact of the above factors is gradually reducing the importance of ArcelorMittal in the global steel market. The company is unlikely to be able to maintain its leading position, which is being taken over by Asian companies.

  • ArcelorMittal transferred 16 billion tenge to the Kazakhstan Khalkyn fund

    ArcelorMittal transferred 16 billion tenge to the Kazakhstan Khalkyn fund

    The public fund “Kazakhstan Khalkyna” received a charitable contribution in the amount of 16 billion tenge from the ArcelorMittal company, the press service of the fund reports.

    The funds received will be used by the fund to implement charitable projects and programs in the field of education and healthcare that will benefit the population of the Karaganda region.

    At least fifty percent (50%) of the contribution amount will be allocated to projects implemented in Temirtau or significantly related to this city.  

    Charitable programs and projects will be aimed at:

    • improving secondary education institutions and supporting students in higher education through scholarships;
    • improving STEM education in the region;
    • provision of medicines to patients with orphan (rare) diseases;
    • providing healthcare institutions with advanced medical equipment and access to the services of medical experts.  

    In total, since its creation, the fund has received 158.8 billion tenge (as of December 1, 2023) from the largest companies, private charitable foundations and organizations, philanthropists and individuals.

    It is noted that for almost two years of activity, the fund initiated the implementation of charitable projects and programs in the Karaganda region for a total amount of 13.96 billion tenge. These include providing patients with orphan diseases with medications, creating flagship schools, providing educational grants to students from socially vulnerable segments of the population, equipping medical organizations with modern equipment, creating rehabilitation centers, providing innovative prosthetics, equipping special schools, opening children’s gyms in villages and others .

  • What will the 16 billion tenge donated by ArcelorMittal be used for?

    What will the 16 billion tenge donated by ArcelorMittal be used for?

    The public fund “Kazakhstan Khalkyna” received a charitable contribution in the amount of 16 billion tenge from the ArcelorMittal company, reports “ Voice of the People ”.

    According to the press service of the foundation, the funds received will be used by the foundation to implement charitable projects and programs in the field of education and healthcare that will benefit the population of the Karaganda region.

    At least 50 percent of the contribution amount will be allocated to projects implemented in Temirtau or significantly related to this city.  

    Charitable programs and projects will be aimed at:

    • improving secondary education institutions and supporting students in higher education through scholarships;
    • improving STEM education in the region;
    • provision of medicines to patients with orphan (rare) diseases;
    • providing healthcare institutions with advanced medical equipment and access to the services of medical experts.  

    In total, since its creation, the fund has received 158.8 billion tenge (as of December 1, 2023) from the largest companies, private charitable foundations and organizations, philanthropists and individuals.

  • Supplies to Europe and the deal with ArcelorMittal. Minister Sharlapaev gave an interview to an American channel

    Supplies to Europe and the deal with ArcelorMittal. Minister Sharlapaev gave an interview to an American channel

    Kazakh Minister of Industry and Construction Kanat Sharlapaev, in an interview with the American television channel CNBC, shared his views on the growing role of Kazakhstan in the European supply chain of critical raw materials and discussed the successful completion of the deal with ArcelorMittal, Tengrinews.kz reports .

    Sharlapaev emphasized the importance of Kazakhstan in the European market.

    “In terms of critical materials and some rare earth elements, Kazakhstan occupies a significant place on the world stage as a leading producer. Our country plays a key role in the production of copper, recognized as an important element in the global economic space. In addition, Kazakhstan is actively involved in the mining of elements such as beryllium , thallium and neodymium, as well as titanium, which are already supplied to the markets of the European Union,” said Kanat Sharlapaev.

    According to him, of the 34 critical materials listed by the European Commission, Kazakhstan is already successfully producing 18.

    The minister was also asked about the recent successful deal with ArcelorMittal.

    “It was successfully completed on the basis of mutual agreement of the parties. ArcelorMittal decided to sell its Kazakh division in favor of the state, however, it is worth emphasizing that the company will continue to operate. This is a unique steel manufacturer for Central Asia with the potential to produce up to 4 million tons of metal products per year,” he noted.

    Sharlapaev stressed that the government has a significant interest in maintaining the enterprise, seeking to improve its performance in the areas of safety and environmental sustainability.

    In addition, the minister stated that Kazakhstan intends to strengthen its position in the European market and create favorable conditions for socially and environmentally responsible investors.

  • ArcelorMittal closes Kazakh unit sale to state-owned QIC

    ArcelorMittal closes Kazakh unit sale to state-owned QIC

    Steel giant ArcelorMittal has concluded the divestment of its Kazakh steel and mining business to state-run direct investment fund Qazaqstan Investment Corporation (QIC).

    The transaction saw the company selling a 100% interest in ArcelorMittal Temirtau and ArcelorMittal Tubular Products Aktau (together called ArcelorMittal Temirtau).

    The steelmaker secured $286m for the sale and another $250m as repayment of outstanding intra-group dues.

    It will also secure a further $450m in sovereign-fund guaranteed payment as intra-group loan repayment. This will be made in four equal annual tranches.

    ArcelorMittal said that the deal had a negative effect on its equity of nearly $800m.

    As of 30 September 2023, the company had valued the ArcelorMittal Temirtau assets at $1.8bn.

    This sale was executed on an ‘as is’ basis, with QIC taking full control and accountability for ArcelorMittal Temirtau. The acquired operations will be rebranded.

    The company has owned as well as operated the Kazakh steel plant and integrated iron-ore coal mines since 1995.

    It had been in negotiations with the Government of Kazakhstan for some months now.

    This follows a fire incident this October at the company’s Kostenko coal mine in the Karaganda region.

    Triggered by a methane gas explosion, the incident claimed the lives of 45 people.

    Kazakhstan president Kassym-Jomart Tokayev ordered a halt on investment cooperation with the steelmaker after the incident and confirmed a preliminary agreement with the company regarding the nationalisation of the Kazakh business.

    The plans for ownership transfer to the government came after a spate of incidents at ArcelorMittal’s mines, including one in 2006 that led to the deaths of 41 miners.

    The Kazakh Government is now looking to foster a conducive environment for the business’ long-term financial and operational stability and define its sustainable future.

    Besides, the company donated $35m to the Qazaqstan Halqyna charitable foundation to fund healthcare and education projects in the Karagandy region.

    ArcelorMittal executive chairman Lakshmi Mittal and CEO Aditya Mittal said: “We would like to take this opportunity to thank the employees of ArcelorMittal Temirtau for everything they have contributed over the past 28 years.

    “While the business faced some serious challenges, there were also many notable achievements, which should be a source of pride. ArcelorMittal Temirtau was a very valued part of ArcelorMittal, and we leave with respectful memories of Kazakhstan and all those who partnered with us.”

  • Mine tragedy: ArcelorMittal Temirtau promised that it would comply with all rights and obligations

    Mine tragedy: ArcelorMittal Temirtau promised that it would comply with all rights and obligations

    The company assured that every effort will be made to ensure that AMT’s activities are organized with effective planning.

    It became known that AMT will make every effort to ensure that the company’s activities are organized with effective planning and to avoid any inconvenience for its stakeholders, reports inbusiness.kz with reference to the press service of the Ministry of Industry and Construction of the Republic of Kazakhstan.

    “Dear business partner, it is with deep sorrow that we inform you that in the early hours of Saturday, October 28, 2023, a disaster occurred at the Kostenko coal mine of ArcelorMittal Temirtau (AMT), resulting in the death of 46 courageous miners. Every effort is being made to support the families killed miners, and an investigation into the cause of the incident is underway.

    In addition, you are likely aware of the announcements made by the Government of the Republic of Kazakhstan and ArcelorMittal regarding the transfer of ownership of ArcelorMittal Temirtau to the Government of the Republic of Kazakhstan. These negotiations have been ongoing for several months, and recently the Government of the Republic of Kazakhstan and ArcelorMittal reached a preliminary agreement regarding the future direction of the steel and mining operations of AMT, as well as its subsidiaries,” the statement said.

    ArcelorMittal Temirtau is one of the most important steel suppliers in the domestic and regional markets. Over the years, the company has established itself as a strategic partner for steel consumers in all selected markets. Therefore, every effort will be made to ensure that AMT’s activities are organized with effective planning and to avoid any inconvenience to its stakeholders.

    AMT assured all interested parties that:

    1. All rights and obligations associated with ArcelorMittal Temirtau (AMT) (including the Temirtau steel plant, coal division, Orken, subsidiaries, including the Aktau pipe plant and representative offices in the CIS countries) will be respected.
    2. The Government of the Republic of Kazakhstan and AMT will ensure full continuation of business with respect to compliance with all rights and obligations of AMT, including supply agreements with customers, acceptance of goods and services, including contractor services from suppliers, obligations to employees, etc.
    3. AMT’s business processes, including order booking, contracting, dispatch, invoicing and supplier contracts, operate as usual.
    4. AMT will continue to be a trusted partner for its clients and will strive to do so in the future.
  • The Ministry of Industry and Construction announced the imminent completion of the deal between the government and ArcelorMittal

    The Ministry of Industry and Construction announced the imminent completion of the deal between the government and ArcelorMittal

    The Ministry of Industry and Construction announced the imminent completion of the deal between the government and ArcelorMittal

    – We inform you that the deal between the Government of the Republic of Kazakhstan and ArcelorMittal is approaching its final stage. In light of the significance of this event, we will organize a briefing immediately after the completion of the transaction. At this meeting we will present all the necessary information and answer all questions,” announced the press service of the Ministry of Industry and Construction.

    Let us remind you that as part of the deal, ArcelorMittal will transfer its Kazakh assets to an investor chosen by the government, who will be ready to invest at least three billion dollars in the next three years. This deal was adopted due to frequent fatal accidents at ArcelorMittal Temirtau mines.

    The government officially announced that a preliminary agreement had been reached on the transfer of the ArcelorMittal Temirtau enterprise on October 28 against the backdrop of the accident at the mine named after. Kostenko, in which 44 miners died. On November 6, ArcelorMittal Temirtau and the Ministry of Industry made a joint statement regarding negotiations on the transfer of property

     

     

  • Ministry of Industry: The deal between the government and ArcelorMittal is approaching its final stage

    Ministry of Industry: The deal between the government and ArcelorMittal is approaching its final stage

    The Ministry of Industry said that the deal between the government of Kazakhstan and ArcelorMittal is approaching its final stage, Zakon.kz reports.

    On November 4, 2023, First Deputy Prime Minister of the Republic of Kazakhstan Roman Sklyar said at a government briefing that ArcelorMittal Temirtau would be bought by a Kazakh investor. It also became known what requirements are imposed on a new investor. 

    On October 31, 2023, Head of Government Alikhan Smailov announced the completion of the transaction to transfer AMT in favor of Kazakhstan.

    Earlier it became known that the new investor will have to invest $3 billion in the modernization of ArcelorMittal Temirtau JSC.

    Tragedy at the mine named after. Kostenko of ArcelorMittal Temirtau JSC in the Karaganda region occurred on the night of October 28, 2023 at 02:33. At the time of the accident, there were 252 people in the mine, and 206 miners climbed to the surface . Initially, four victims were reported, but all those who remained underground died – 46 miners.

    After an emergency in the mine named after. Kostenko, head of state Kassym-Jomart Tokayev instructed the government to stop investment cooperation with ArcelorMittal Temirtau. Then the government stated that they had already reached a preliminary agreement with AMT shareholders, and also noted that “the formalization of the transaction to transfer ownership of the enterprise in favor of Kazakhstan is being completed.” Later, ArcelorMittal confirmed the transfer of the company to the ownership of Kazakhstan.