The listed steel technology group Voestalpine is withdrawing from its pig iron factory in Texas, the company announced on Sunday evening. For the production of iron pellets (HBI, Hot Briquetted Iron) in Corpus Christi, talks are currently underway to sell 80 percent of their shares. “Negotiations are at an advanced stage,” the group announced.
In recent months, the group has conducted an “open-ended market survey to stabilize the business model” of its direct reduction plant in Texas. Voest’s continued participation should include an agreement to secure the long-term future volume of TDI required for the first decarbonisation step at the Linz and Donawitz sites.
One less problem child
With the sale of the 80 percent interest, Voest would have one less problem child: depending on the outcome of the negotiations, a successful completion of the sales project could lead to a book profit to be reported under “discontinued operations” and in a “significant reduction of voestalpine’s net financial debt,” the broadcast said succinctly. In the 2021/2022 financial statements, voestalpine Texas Holding will likely be recognized as a discontinued operation “within the meaning of IFRS 5”.
Inaugurated five and a half years ago
The Corpus Christi plant, which came into operation in late 2016, has been accompanied by numerous setbacks and write-offs in the millions. According to the company, the construction costs for the direct reduction installation amounted to approximately 870 million euros – “1.012 billion dollars at the exchange rate prevailing at the time”.
Due to a difficult market environment, “unplanned write-offs totaling EUR 372 million” had to take place in 2019 and 2020. The voestalpine subsidiary has been able to “increasingly stabilize” its business model, product and customer structure in recent years.
Raw iron remains important
HBI (pig iron that is further processed) remains important for voestalpine as a raw material in steel production. According to its own statements, the group has “developed a clear plan for the decarbonization of steel production” with greentec steel. With the commissioning of one electric arc furnace each in Linz and Donawitz in early 2027, CO2 emissions should be reduced “significantly by about 30 percent”. That corresponds to almost 5 percent of Austria’s annual CO2 emissions.
The raw material concept, which is continuously developed by Voest, consisting of scrap, molten pig iron and HBI, will also enable the production of green high-tech steel types in the future, such as those used in the automotive and railway industry.
Source: Krone
I’m Wayne Wickman, a professional journalist and author for Today Times Live. My specialty is covering global news and current events, offering readers a unique perspective on the world’s most pressing issues. I’m passionate about storytelling and helping people stay informed on the goings-on of our planet.
