Metinvest eyes Danieli joint venture for Italian plant

Metinvest and Italian equipment maker Danieli will create a joint venture to build a new steelmaking plant in Italy that plans to produce low-carbon steel, Kallanish learns from a source close to the steelmaker.

Danieli president Gianpietro Benedetti says in a joint note that the plant will be key for the post-war recovery of Ukraine. Feasibility studies are now underway to select the right location for the future mill that will see an investment of €2 billion ($2.2 billion), financed by a pool of public and private European financial institutions. The venture is the first step towards Metinvest’s shift towards “green” steel.

The future electric arc furnace plant in Italy will be fed by raw material coming from Metinvest facilities in Kryvyi Rih. “In addition to the environmental modernisation of the Ukrainian steel mills and the increase of DRI pellet production in Kryvyi Rih, the new Italian site will play a significant role in the environmental transformation of the group, of Ukraine and the European Union,” the note says.

Several city councils around Porto Nogaro in northern Italy, where Metinvest is rumoured to be planning the electric arc furnace works, have voted against the construction of the plant. City councils such as Grado, Marano and others located in the lagoon and coastal area, a famous tourist destination, strongly oppose the project. They have issued motions and are asking the Friuli Venezia Giulia region to also vote against the project, arguing it will disfigure and pollute the landscape besides impacting tourist activity.

In July last year, Metinvest management visited the area for a series of meetings with Friuli Venezia Giulia regional authorities and Benedetti. Metinvest refused to comment at that stage as the final investment decision was yet to be reached. However, regional authorities said they were ready to invest €80 million, for which an agreement was expected to be signed by the end of August 2023.

Benedetti told local press at the time that Metinvest will need to produce about 1.5 million tonnes/year of slab after losing its flagship Azovstal plant in Ukraine. The steelmaker will also have to establish a second mill, at a cost of about €350m, to produce hot strip. The two facilities may cost €800m in total (see Kallanish passim).

“Metinvest has planned the construction of a new ‘green’ steelmaking plant long before the start of the full-scale Russian invasion. The ongoing hostilities and the blockade of Ukrainian ports for steel and mining products have accelerated this project, which will secure our products in the market, employ thousands of employees in Ukraine, increase revenues and ensure long-term support to the country’s economy,” comments Metinvest chief executive Yuriy Ryzhenkov.

Natalia Capra, France