TMK deconsolidates EU steel mills; Rusal about to lose alumina refinery to Ukraine: sources

Russian steel pipe maker TMK and Russian aluminum producer Rusal are set to lose some of their foreign assets — the former in the EU and the latter in Ukraine, industry sources told S&P Global Commodity Insights Jan. 12.

Romanian steel pipe manufacturer TMK-Artrom is changing its name to Artrom Steel Tubes due to a change of ownership; the enterprise no longer belongs to TMK, having been sold to an unnamed Serbian company, a source at Artrom told S&P Global Jan.

An Artrom spokesperson declined to comment, saying the company would issue an official announcement soon. A TMK spokesman declined to confirm the deal.

However, on its website, TMK said it had excluded from the list of affiliated entities its only manufacturing division in the EU — TMK-Artrom – along with several EU-based procurement and marketing firms, including TMK Europe and TMK Italia.

Romania-based seamless pipe producer TMK Artrom, now Artrom Steel Tubes, comprises the 450,000 mt/year Resita steel billet casting mill and the 200,000 mt/year Slatina pipe rolling mill, as well as sales offices in Italy and Germany.

It is not clear whether the deconsolidation of Artrom is a decision taken under pressure from sanctions, or whether TMK had been seeking buyers for the Romanian mills before Russia’s invasion of Ukraine, but the latter has clearly accelerated the process.

In March, shortly after the EU imposed sanctions on then-TMK owner Dmitry Pumpyansky, Romania’s tax authority blocked TMK-Artrom’s bank accounts, disrupting its sales operations and prompting union members at the Slatina and Resita mills to stage a protest to force the government to lift the restrictions, as S&P Global reported.

At the time TMK-Artrom said it had contracts with more than 600 customers from the EU, the US and Canada.

TMK invested Eur250 million in the two plants over several years. However, this amount is unlikely to fully include the project TMK announced in 2019 that was aimed at increasing TMK-Artrom’s rolling capacity by 60% to 320,000 mt/year by 2024.

Ukraine moves to take over Rusal refinery

In Ukraine, the government has initiated the nationalization of a significant Rusal alumina asset, a move not without precedent; shortly after Russia annexed the Crimean Peninsula in 2014, Ukraine took ownership of an aluminum smelter owned by Rusal.

Rusal may lose its 100% ownership of Ukraine-based Nikolaev Alumina Refinery for good; Ukraine’s justice ministry said Jan. 10 that it had asked the country’s anti-corruption high court to approve its seizure on the grounds that Rusal supplies the Russian defense industry, according to the information available to the ministry, arguing that Ukraine’s aluminum-making raw materials must not be made available to the Russian company for that purpose.

Apart from the Nikolaev (or Mykolaiv in Ukrainian) alumina refinery, the ministry also asked the court to sanction the expropriation and transition to Ukrainian state ownership of Glukhiv Quarry Quartzite, Zaporizhsky Aluminum Combine and several other assets, most of which are minor and are affiliated to Russian oligarch Oleg Deripaska, according to the ministry.

Rusal had obtained a license for the extraction of quartzite at the Glukhov mine in 2017 and the permit was due to remain valid until 2037, the company said in its 2017 annual report.

However, Zaporozhye (aka Zaporizhsky) Aluminium Combine, or ZALK, has long been deconsolidated. Rusal had lost control of ZALK, 98% of which it used to own, in March 2015, when Ukraine’s Supreme Court upheld a previous court decision to renationalize and transfer to the State Property Fund of Ukraine 68% of ZALK’s shares, according to Rusal’s report for 2015.

— Ekaterina Bouckley