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How ArcelorMittal plans to put Ilva back

Steel News - Published on Thu, 13 Dec 2018

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ArcelorMittal's management believes strongly in the potential of its newly acquired Italian branch. On December 11, the group unveiled in Paris its roadmap to make the worst steel mill in Europe a site of excellence.
How ArcelorMittal plans to put Ilva back ArcelorMittal has launched the major renovation and transformation project of the Ilva steelworks in Taranto (Italy). © ArcelorMittal

It must be admitted, in 2015, at the announcement of his interest in Ilva and its steel plant in Taranto (the most polluting in Europe), we grimaced. A bit like when a real estate agent tells us about enormous potential in front of an apartment visibly eaten away by moisture or termites. Four years later, Mathieu Jehl, CEO of ArcelorMittal Italia, and Aditya Mittal Group Chairman, do not stop there: Ilva is "a strategic asset for ArcelorMittal" . This costly acquisition serves two purposes: to position itself strongly in the Italian market, Europe's second largest steel consumer, and to concentrate production on large-scale sites. Ilva is the largest integrated steel mill on the continent.

Admittedly, 2.4 billion euros of capex for a steel plant that leaks as many pollutants as cash is expensive. The sum is so enormous that it has to be brought back to a more reasonable scale to grasp its magnitude. This is more than a million euros invested every day by 2024. But it is the effort needed to put Ilva back to the level of environmental and economic demands of the steel group.

Discount to environmental standards

The first goal is to stop the bleeding. Not financial (we'll see that it is promised to a quick end anyway), but reputation. It all starts with the identification of risks and the training of staff. Of the 13,800 employees of Ilva, ArcelorMittal rehire 10,700. That is 260 contracts to sign daily by January. In November and December, 7,500 employees will have attended the safety training, the group's operational tools and information campaigns are put in place on protections and risky behavior.

At the same time, work on environmental compliance of the site is progressing rapidly. They represent half of the total reinvestment of ArcelorMittal, or 1.15 billion euros. Half a million a day. The raw material storage facilities are being covered by a huge structure for an amount of 300 million euros. A project "unique in Europe", says ArcelorMittal. The operation is expected to be completed by the end of 2019 for the iron ore park by May 2020 for the coal (coke and thermal) facility. This will also be the case for conveyors. "All buildings and equipment from which dust will escape will be closed," promises Mathieu Jehl.

The sealing, recovery and treatment of runoff and process water are dedicated to 167 million euros. Filters will be installed on the chimneys of the agglomeration units (by 2021 for the first and 2022 for the second) to reduce emissions of dust, metal particles and dioxins below the European thresholds (35 million euros ). The coking plant will be fully restored to the highest standards (desulphurization of coke oven gas in particular) for 200 million euros. Lastly, the Fire Prevention Plan is allocated 40 million. The balance is allocated to various environmental improvements.

Stop the financial bleeding

On the roadmap of ArcelorMittal for Ilva, the stop of the operational losses intervenes as of 2019. A challenge, for a company which lost until then 20 to 25 million euros per month. Beyond this horizon, it will be working on the incremental improvement of operational excellence. In the longer term, ArcelorMittal intends to deploy, in Italy as elsewhere, the pilots currently developed in R & D (charcoal, ethanol, hydrogen ...) to go towards a carbon-free steel. If confirmed, such a turnaround will dream more than one industrialist. The target set is to reach by 2019 a production of 6 million tons of crude steel.

To achieve this goal, the group put the means. It allocates 1.25 billion euros of risk capital to operational improvement. Among the major investment stations, blast furnaces and converter will swallow some 350 million euros, the mechanical upgrade and automation of the finalization of products 250 million, the power plant 60 million ...

"The three levels of our activity - buying, producing, selling - have been questioned and will be optimized," says Mathieu Jehl. "Ninety percent of the problems in Ilva have already been encountered elsewhere in the group ," says the leader, " Rather than reinventing the wheel, we will be importing solutions

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Posted By : Nanda Koijam on Thu, 13 Dec 2018
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