The project would be financed through government grants and external investments totaling about €2 billion ($2.2 billion), a joint statement on the website of Italy’s Ministry of Economic Development (Mimit) said on Wednesday January 17.
“Now, feasibility studies will be carried out at the site [in Piombino]; after that, the binding contract will be signed, outlining specific obligations of the parties,” a source familiar with the matter told Fastmarkets.
Liquid steel production at the Piombino site was stopped in 2014, when a blast furnace with capacity of 2.4 million tpy was idled; it has been operating as a rerolling site since then, Fastmarkets understands.
“This project, with capacity of around 3 million [tpy] of steel, will play a crucial role in Italy’s green transition by implementing sustainable and environmentally friendly industrial practices,” Yuriy Ryzhenkov, chief executive officer at Metinvest Group, said in the joint statement.
The production route for this 3 million tpy facility would most likely be based on electric-arc furnaces for processing direct-reduced iron, Fastmarkets heard.
“Additionally, it will help boost the utilization of our iron ore mining and processing plants in Ukraine, driving their modernization to produce high-quality pellets,” Ryzhenkov said.
Metinvest’s iron ore operations in Ukraine are operating at 35-45% of capacity. Logistics issues, including Russia’s blockage of Black Sea ports, are the major obstacle for production ramp-up, market sources said.
Ryzhenkov has said that Metinvest would consider investing in a new steelmaking asset in Europe.
“The purpose of the industrial project is to develop, build, own, operate and maintain an environmentally sustainable plant for the production of finished steel products obtained through the transformation of ferrous materials into hot-rolled coils subject to further processing, to be produced in Piombino on an area of about 260 hectares,” the joint statement said.
“This agreement is an important first result that will lead to the construction of a plant that will be one of the first fully digital plants and will have a major positive impact on employment,” Gianpietro Benedetti, president at Danieli Group, said in the statement.
JSW Steel and Piombino
India’s JSW Steel acquired the Piombino site from Algeria’s Cevital in 2018. JSW Steel Italia operates three rolling mills in Piombino that make rail, wire rod and bar products and rely on billet and bloom shipments from its parent company.
JSW had announced plans to resume steelmaking in Piombino, but they were never implemented.
Sources familiar with the matter said the Italian government is seeking an agreement with JSW to develop rail production in Piombino.
On Thursday January 18, Minister Adolfo Urso met with Sajjan Jindal, CEO of the JSW Group, to discuss plans for relaunching the Piombino steelmaking hub.
“The meeting made it possible to define the modalities of the new program agreement, aimed at resuming rail production,” a statement on Mimit’s website said.
“In the next few days, the memorandum of understanding between Mimit and JSW will be signed — which, as in the case of Metinvest, will identify timing and procedures to allow the two production projects to be developed in the steel industry,” the statement added.
Published by: Julia Bolotova