International Steel Mills

Vale Selling Its Stake in CSA to Thyssenkrupp

Written by Sandy Williams

German steel giant and elevator manufacturer Thyssenkrupp is back in steel industry news again. The company will take full ownership of Companhia Siderúrgica do Atlantico (CSA) from Brazilian mining company Vale SA.

Vale owns 27 percent of CSA and plans to sell it to Thyssenkrupp AG for a “symbolic price” while remaining sole supplier of iron ore to the mill and divesting itself of CSA’s debts. If Thyssenkrupp should sell CSA to a third party, Vale will be entitled to future income for an unspecified “period of time.”

The sale will give Thyssenkrupp, which owns 73 percent of the plant, full control of the steel mill’s fate. CSA has been struggling with soaring production costs amid a Brazilian recession and global pricing pressure. CSA reported a debt of €2.6 billion euros for 2015 (nearly $3 billion USD) and an operating loss of €74 million ($84.2 million) for Q1 2016.

CSA was part of Thyssenkrupp’s plan to expand steel production to the Americas and included what is now AM/NS Calvert in Alabama, jointly owned by ArcelorMittal and Nippon Steel & Sumitomo. CSA still continues to provide slabs to the Calvert mill.

Thyssenkrupp attempted to sell its stake in CSA in 2013 without success. Full ownership of CSA may give Thyssenkrupp the advantage it needs to completely exit steel production in the Americas.

CSA has a production capacity of 5 million tonnes of steel slab per year.

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