The project was intended to promote the industrial revitalization of the town, located on the shores of Tuscany.
The new green steel plant will be based around an electric-arc-furnace (EAF) and will have capacity for 2.7 million tonnes per year of hot-rolled coil. The total investment was expected to reach €2.5 billion ($2.63 billion), Metinvest said.
“The plant will leverage technologies based on EAFs and recycled materials, including scrap, pig iron and direct-reduced iron [DRI] sourced from Ukraine,” Metinvest said in a statement seen by Fastmarkets.
According to Metinvest, Italian export credit agency SACE and other leading financial institutions in the country have officially expressed interest in providing financial support for the project.
Italian government grants were also expected to support the project.
The Italian port management authorities also confirmed the project’s alignment with their development plans, Metinvest said.
The joint declaration builds on already-signed agreements between all key stakeholders in the new green steel project – the Tuscany Region, the Municipality of Piombino, Italian equipment supplier Danieli, and Metinvest Adria.
An initial Memorandum of Intent was announced in January 2024, and a Memorandum of Understanding was signed in April this year.
An additional Program Agreement was expected to be signed by the beginning of 2025, Fastmarkets understands. The document will define specific actions, including land remediation concessions, development contracts via Italy’s development agency Invitalia, employment protection measures, renewable energy initiatives, and improvements to the port infrastructure, Metinvest said.
“The project will help to strengthen the Italian steel industry and Ukraine’s mining operations, showcasing the potential of international cooperation in fostering sustainable industrial development,” Metinvest Group chief executive officer Yuriy Ryzhenkov said.
Complementing existing assets in Italy
The investment in the new green steel plant will also help Metinvest to complete the value chain of its metallurgical assets in Italy, and to reduce reliance on imported semi-finished products, Fastmarkets understands.
In Italy, Metinvest operates two rolling mills. Ferriera Valsider has two rolling lines for the production of heavy plate and hot-rolled coil. The heavy plate line has capacity for 400,000 tonnes per year while the HRC mill has capacity for 600,000 tpy. Trametal, meanwhile, is equipped with a heavy plate mill with capacity for 600,000 tpy.
Before Russia’s invasion of Ukraine in February 2022, Metinvest used to feed Italian rolling mills with steel slab from its Ukrainian assets, supplying around 100,000 tonnes per month to its Italian mills, a source familiar with the matter told Fastmarkets.
After acquiring slab from Ukrainian assets became impossible due to Russia’s invasion, Metinvest and other Italian re-rollers had to look for alternative slab sources, and found them mainly in Asia.
Metinvest has been exploring opportunities to buy its own steelmaking facility in Europe since 2022.
Metinvest gains property rights at Piombino
This week, another agreement related to the construction of the new green steel plant came to light. JSW Steel Italy, a subsidiary of India’s JSW Steel and a current owner of the Piombino site, signed a commercial agreement with Metinvest Adria regarding the transfer of rights over part of the property.
Metinvest will have to pay €30 million to JSW Steel Italy for the transaction, the Indian company announced to the National Stock Exchange of India.
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 which rely on billet and bloom shipments from its parent company.
JSW had several times announced plans to resume steelmaking in Piombino, but these were never implemented.
According to Fastmarkets’ sources, the Italian government was seeking an agreement with JSW to develop rail production at Piombino.
This was confirmed by the recent statement from JSW Steel, which said that in March 2024 a Memorandum of Understanding to this effect was signed between JSW Steel Italy and the Italian authorities.
The document outlined several areas of cooperation, which included the implementation of JSW’s rail mill modernization project, setting up a hardening facility, and increasing the length of the rails being produced to as much as 120 meters.
JSW Steel added that its cooperation with the Italian authorities was intended to achieve “the revival of the industrial site of Piombino as a steel hub.”
Steelmaking decarbonization gains pace in Europe
More than 50 million tonnes of new green steelmaking capacity – using just EAFs or a combination of EAFs and DRI – was expected to come online in Europe in the period 2025-30, Fastmarkets has estimated.
Italian steel producers have joined the race to achieve net-zero carbon emissions by 2025, in line with those goals.
For example, DRI Italia, a wholly owned subsidiary of state-owned development agency Invitalia, was to build a DRI facility at the Taranto steelworks at Puglia in southeast Italy, using state funds.
The company said that the 2 million tpy DRI module would become operational by 2026. EAFs at the Taranto site were scheduled be built by 2026 as well.
In 2022, EAF-based flat steel producer Arvedi revealed plans to invest about €227 million in the “green” transformation of its steel plants at Trieste and Cremona.
In 2023, the company launched its own green steel brand, Arvzero
Published by: Julia Bolotova, Darina Kahramanova
