ArcelorMittal to acquire 80% stake in HBI plant from voestalpine

ArcelorMittal has agreed to acquire a stake of 80% in a hot briquetted iron plant (HBI plant) owned by Austrian steel industry company voestalpine in Corpus Christi, Texas.

The remaining 20% stake in the hot briquetted iron facility will be retained by voestalpine. The Corpus Christi operations are valued at $1 billion and the closing of the deal is subject to obtaining customary regulatory approvals.

Herbert Eibensteiner — CEO of voestalpine said: “This transaction secures our supply of HBI over the long term, allows us to develop the business model in Texas together with our partner, and to continue with our promising decarbonization and green steel production plans.

“Furthermore, the purchase price is significantly higher than the carrying amount. The accounting profit from the transaction is expected to amount to approximately EUR 280 million (approximately USD 310 million), of which the majority will be reported in net income in the 2021/22 financial statements.”

ArcelorMittal to acquire 80% stake in hot briquetted iron plant in Corpus Christi from voestalpine. Photo courtesy of voestalpine AG.

The HBI plant in Corpus Christi has been operating since October 2016. Its capacity is two million tonnes of hot briquetted iron per year, a high-quality feedstock made via the direct reduction of iron ore used for producing high-quality steel grades in an electric arc furnace (EAF).

Hot briquetted iron, which is a compacted form of direct reduced iron (DRI), can also be utilized in blast furnaces, which leads to reduced coke consumption, said ArcelorMittal.

Parallelly, ArcelorMittal has entered into a long-term offtake deal with voestalpine for supplying an annual volume of hot briquetted iron commensurate to the latter’s equity stake in its steel mills located in Donawitz and Linz, Austria.

The remainder of production from the hot briquetted iron plant in Corpus Christi will be supplied under existing supply contracts to third parties. It will also be delivered to ArcelorMittal facilities, which include its AM/NS Calvert joint venture Nippon Steel in Alabama, following the commissioning of its 1.5 million tonnes electric arc furnace (EAF), which is anticipated in the second half of 2023.

Aditya Mittal — ArcelorMittal CEO said: “This is a compelling strategic acquisition for our company. It accelerates both our progression into producing high-quality metallic feedstock for EAFs and our global decarbonisation journey.

“The facility is world-class and is ideally located, with its own deep-water port. There is also unused land on the site which provides interesting options for further development.”