Steel, ArcelorMittal snubs the former Ilva but invests in France
While in Italy ArcelorMittal shows no intention of committing itself to the former Ilva, in France it will invest 1.8 billion euros for the production of green steel in Dunkirk. All the details
ArcelorMittal does not appear to be at all willing to invest in the revival of Acciaierie d'Italia, the steel company formerly known as Ilva, and has opposed the government's plan for the capital increase, which would have the effect of reducing its shareholding from the current 62 percent to around 35-40 percent. As explained by the government, the Indian-Luxembourg group is not willing "to undertake financial and investment commitments, even as a minority shareholder". The most widespread impression is that ArcelorMittal wants to get a severance package.
If this is the situation in Italy, in France ArcelorMittal has reached an agreement with the French government to invest 1.8 billion euros in upgrading the Dunkerque steelworks in order to reduce its emission levels.
WHAT ARCELORMITTAL WILL DO IN FRANCE
As anticipated, ArcelorMittal's investment will allow emissions from the Dunkerque plant in northern France to be cut by 6 percent. The French government is trying to encourage the reconversion of this area from an impoverished former mining center to a hub for new sustainability industries: not only "green" steel but also battery and intermediate materials factories, for example, such as those of ProLogium and Oran .
The French state will participate in the investment in the steel plant – 1.8 billion euros in total – with a maximum sum of 850 million. The money will be spent on two electric furnaces and a direct iron reduction plant, two technologies that make it possible to reduce emissions from steel production, a very energy-consuming activity and the cause of significant quantities of CO2 emissions.
SPAIN ALSO SUPPORTS THE GREEN STEEL OF ARCELORMITTAL
About a year ago, the European Commission authorized Spain to grant aid of 460 million euros to ArcelorMittal for the conversion of the Gijón steelworks: the two blast furnaces powered by natural gas will – also in this case – be replaced with a furnace electric and a direct reduction plant powered by hydrogen.
THE ROLE OF NUCLEAR ENERGY
ArcelorMittal's investment is favored by the proximity of the Gravelines nuclear power plant: the company will soon sign an agreement with the energy company Electricite de France (EDF) for the long-term supply of clean electricity. EDF, moreover, intends to build two new reactors at the Gravelines site.
The role of cheap atomic energy was also underlined by ProLogium as a favorable condition for investment.
MEANWHILE, IN ITALY…
As far as Italy is concerned, according to Corriere della Sera ArcelorMittal should opt for a "soft" exit from Acciaierie d'Italia, in order to avoid "a long legal dispute". According to the sources of the RCS newspaper, in the wake of those of the day before by Repubblica , the group will ask for a severance payment of 250-300 million euros, "against a book value of approximately 420 euros": this is 40 percent of the valuation of the former ILVA in 2020, at the time of the pact between ArcelorMittal and Invitalia; the percentage of 40 percent is roughly what ArcelorMittal will drop to after the recapitalization by the government. The deadline for negotiations between the parties is January 17th.
As reported by Corriere , Italy had also stipulated a pact with ArcelorMittal similar to the French one: this is the memorandum of 11 September, coordinated by the Minister for European Affairs (with responsibility for the South) Raffaele Fitto and containing investments for 4 .6 billion, with a public contribution of 2.2 billion. “But the agreement”, writes the newspaper, “did not please Invitalia or his government colleague Adolfo Urso”, head of the Ministry of Business.
As for the possible new partners of Invitalia in Acciaierie d'Italia, the most recurring names are those of Vulcan Green Steel, Metinvest and above all Arvedi. “Already in 2017 Arvedi with Jindal, Cdp and Delfin had presented an offer for the Taranto hub, as a consortium opposing ArcelorMittal”, recalls Il Sole 24 Ore .
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/energia/arcelormittal-francia-acciaio-verde-dunkerque/ on Mon, 15 Jan 2024 10:22:55 +0000.