After exploring strategic options for over a year for its direct reduction plant in Texas, USA, voestalpine is now selling 80% of its shareholding in the plant to rival steelmaker ArcelorMittal, Kallanish notes.
The hot-briquetted iron project in Corpus Christi was announced in 2012 and started operating four years later. The costs of construction amounted to around €870 million ($1.012 billion at the exchange rate at that time). It was necessary to make unplanned write-offs totalling €372m in 2019 and 2020, in response to the difficult market environment, voestalpine notes.
The plant has an annual capacity of 2 million tonnes of HBI, which is used to produce high-quality steel grades in an electric arc furnace, but which can also be used in blast furnaces. According to both companies, the enterprise value for 100% of the shares in voestalpine Texas is approximately €900m ($1 billion at today’s exchange rate).
The new partnership secures a long-term agreement for voestalpine to annually procure 420,000 tonnes of HBI produced at the plant. This provides the basis for further decarbonisation of steel production at Linz and Donawitz, it says.
According to ArcelorMittal, the remaining balance of production will be delivered to third parties under existing supply contracts, and to ArcelorMittal facilities, including AM/NS Calvert in Alabama. The latter will commission its 1.5m t/year EAF in the second half of 2023.
“The facility is world-class and is ideally located, with its own deep-water port. There is also unused land on the site which provides interesting options for further development,” says ArcelorMittal chief executive Aditya Mittal.
The plant currently uses natural gas but has the potential to transition to 100% hydrogen, with the Texas coast presenting advantageous weather conditions to produce renewable energy-powered green hydrogen, ArcelorMittal notes.
Christian Koehl Germany
