ArcelorMittal buys metal mill from Vale for US$2.2 billion

ArcelorMittal buys metal mill from Vale for US$2.2 billion

Among the objectives of the acquisition, the Espírito Santo company highlights the ability to add 3 million tons of high-quality slab production, in addition to increasing investments from other groups to form a clean electricity and green hydrogen hub in Pecém (CE)

ArcelorMittal signed an agreement with the shareholders of Companhia Siderúrgica do Pecém (CSP) to acquire the plant, located in the State of Ceará, for approximately US$ 2.2 billion. Closing of the transaction is subject to corporate and regulatory approvals, including approval from the Administrative Council for Economic Defense (Cade), which is expected by the end of 2022. Vale has a 50% stake in the venture, while South Korean companies Dongkuk and Posco have 30% and 20% respectively.

CSP’s facilities started operating in 2016. The plant operates a blast furnace with a capacity of three million tons and has access to the Port of Pecém, located 10 kilometers from the company.

According to a statement sent by ArcelorMittal, the acquisition brings several strategic benefits to the company, including the expansion of its position in the Brazilian steel industry, which has “potential for high growth”.

The company also aims to capitalize on significant third-party planned investment to form a clean electricity and green hydrogen hub in Pecém.

The company also highlights the addition of 3 million tonnes of production capacity for high-quality, cost-competitive slabs, with the potential to supply slabs within the group or to sell in North and South America.

The acquisition will also allow, according to Arcelor Mittal, new expansions by the company, such as the option to add primary steelmaking capacity (including direct reduction of iron ore – DRI) and rolling and finishing capacity; and capture more than US$50 million of identified synergies, including SG&A, procurement and process optimization.

GREEN HYDROGEN HUB

The State of Ceará has the ambition to develop a low-cost green hydrogen hub. The Pecém Green Hydrogen Hub, a partnership between the Pecém Complex and Linde, a world-leading industrial gases and engineering company, is a large-scale green hydrogen project in the Port of Pecém that aims to produce up to 5GW of renewable energy. and 900 kt/a of green hydrogen in several phases.

The first phase, which the partnership currently expects to be completed over the next five years, aims to build 100-150MW of renewable energy capacity.

With information from ArcelorMittal

Source: The Gazette

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