EU approves Liberty Steel buy of Hungary’s Dunaferr steelworks

The EU has approved the sale of Hungary’s Dunaferr iron and steel works to UK-registered Liberty Steel, putting the mill’s rescue on track, the Hungarian Ministry of Economic Development said Oct. 3.

“With the approval, the last obstacle to the successful sale and future of Dunaferr has been removed,” Gergely Fábián, minister of state for industrial policy and technology, said in a statement on the government’s website.

A Liberty Steel spokesperson Oct. 4. separately confirmed the EU gave “regulatory approval” for it to buy the Dunaferr steelworks. “We are now working at pace to complete the transaction as quickly as possible,” the spokesperson told S&P Global Commodity Insights.

The mill is capable of producing 1.2 million mt/year of hot iron and 1.6 million mt/year of crude steel.

The EU approved Liberty Steel’s acquisition of Dunaferr under a “simplified merger control procedure” in which that company submitted a winning Eur55 million bid ($58 million), according to the economic development ministry.

“Dunaferr became insolvent due to the irresponsibility of its previous foreign management and misguided [anti-Russian] sanctions,” Fábián said adding that the operation of the plant became impossible, as a result, endangering jobs of thousands of workers. While Dunaferr “escaped” from last year’s seemingly hopeless situation, there is still a lot to be done to insure its continued operation, and the Ministry of Economic Development will continue to play an active role in the future of the company, a key Hungarian economic player, according to Fábián.

The EU’s approval of the sale of Dunaferr to Libery Steel follows a protest in July from Ukraine’s Metinvest iron ore mining and steel company, which also competed for Dunaferr but was not admitted to the final bidding round, asking EU competition authorities investigate that tender, which, in its opinion, did not meet transparency criteria.

In August, Liberty Steel, Dunaferr’s management and liquidator agreed to stop smelting operations at the mill, taking offline its only operating blast furnace [of the two in total installed there] for at least three months. The weak European market, large volumes of foreign imports, costs in meeting EU carbon emission standards and preparations for a “green” transformation were cited as factors for the pausing steel production at the plant.

In September, Liberty Steel signed a memorandum of understanding with the Hungarian government and Chinese engineering company CISDI to develop a plan to reduce the mill’s scope 1 CO2 emissions by potentially 80%, something that could be achieved by re-equipping the currently met coal-based plant with electric arc furnace technology.

In July 2022, Liberty Steel informed the market of the green transition in the works for its Liberty Galati mill in Romania, the largest in that country and one of the largest in Eastern Europe. The company was then to select a supplier of hybrid electric arc furnace for Galati to produce low-carbon steel, but the tender was never completed. Around the same time, Liberty signed a contract with Italian plant-maker Danieli for the supply of two hybrid EAFs for its other Eastern European steelworks, at Ostrava in the Czech Republic.

“We have made good progress with Ostrava’s GREENSTEEL transformation, with the development of the main energy bridge underway, space freed up for the control center, land acquired for the planned new high speed electricity line and the feasibility study for a new 150-MW solar farm at the plant now complete,” the Liberty Steel spokesperson said.

Katya Bouckley