Tata, government conduct ‘detailed’ negotiations over IJmuiden decarbonisation

Tata Steel says it is taking part in “a detailed framework of diligence, analysis, discussions and negotiations” with the Dutch government over potential decarbonisation funding. However, it is too early to confirm any details of a potential deal with authorities.

The steelmaker was responding to reports that the government is prepared to cough up billions of euros to decarbonise the IJmuiden operations.

In March, the Dutch Parliament formally gave a mandate to the government to negotiate the terms of potential support towards a proposal for Tata Steel Nederland’s decarbonisation.

The “detailed framework” will run over several months before potentially culminating in an agreed set of terms, Tata says. These terms will then require approval from the Parliament as well as Tata Steel’s board. “It may be premature to draw any final conclusions at this time and hence the Company is not in a position to comment any further,” the steelmaker adds in a stock exchange filing seen by Kallanish.

Unlike its less profitable UK plant, at its Ijmuiden plant in the Netherlands, Tata plans, thanks to gas availability in that country, to build a gas-based DRI-EAF operation, later migrating to hydrogen when it becomes available. Ijmuiden already has a pellet plant which facilitates the DRI route.

Last week, Tata awarded contracts to Danieli and Tenova for the basic engineering of a direct reduction plant, an EAF and other facilities at IJmuiden (see Kallanish passim).

Tata Steel’s Netherlands operations reduced shipments 3% on-year in the March quarter to 1.43 million tonnes. However, this was up 10% on-quarter as blast furnace no.6 ramped up following its reline completed in early February. Liquid steel output was also down 3% on-year but surged 24% versus the December quarter to 1.48mt.

Adam Smith Poland

kallanish.com