ArcelorMittal’s Spanish subsidiary temporary lay-off plan approved

A petition for temporary layoffs at ArcelorMittal’s Spanish subsidiary due to a force majeure following a fire at the Gijon smelter in March has been approved by Spain’s labor authorities, the company said April 19.

It did not disclose details of the plan, which was proposed March 24 following the fire at one of the two furnaces at the 4.5 million mt/year site.

The plan received backing from the main unions, ArcelorMittal said.

According to local press reports, citing company sources, the six-month lay-off plan affects around 7,000 workers in the Asturias cluster and other sites, such as Sagunto near Valencia, Etxebarri in the Basque region and Lesaka in Navarra. Workers will retain 90% of their salaries during the period and other benefits.

In Sagunto, ArcelorMittal produces cold-rolled sheet steel as well as galvanized sheet. Etxebarri specializes in chrome plate steel and Lesaka in colored galvanized plate.

Work to clear the damaged site at Gijon is ongoing, a company spokesperson told S&P Global Commodity Insights April 19, adding that it should be concluded within a week and a half.

Following that, the damage will be assessed and the company will estimate the costs and timeframe of repairs.

An initial, non-official prognosis cited in local press was that the plant would be out of action for at least two months.

The fire broke out March 27 when hot metal came into contact with water in the crucible of the furnace, forcing hot metal out of its wall and out of a nozzle which was due to be replaced, according to ArcelorMittal.

Blast furnace A had only restarted in February after four months of inactivity to run at reduced rates in line with market conditions.

Furnace B at the 4.5 million mt/year site continues to operate normally.

Platts, part of S&P Global Commodity Insights, assessed cold-rolled steel at Eur820/mt CIF Antwerp on April 19, unchanged on the day.

Spain’s government said April 4 it approved funding of Eur450 million ($500 million) to ArcelorMittal for a “green steel” project at Gijon, which will use hydrogen generated from renewables to decarbonize both the steel production and downstream industries.

Overall investment is slated at around Eur1 billion ($1.1 billion), which covers a 2.3 million mt/year hydrogen-fed DRI unit and a 1.1 million mt hybrid electric arc furnace, aimed at reducing the mill’s CO2 emissions in Spain by 50% (4.8 million mt).

ArcelorMittal’s other main steel mill, the 1 million mt/year EAF at Sestao, is currently running intermittently, the company said, without adding details. According to El Espanol, the rate is around 60%, with six days on and four days off, with renewable supplied energy attracting orders.

Author Gianluca Baratti, support@platts.com