International Steel Mills

ArcelorMittal hints USS sale to Nippon could trigger Calvert ownership change

Written by Michael Cowden

ArcelorMittal indicated that a sale of U.S. Steel to Nippon Steel could lead to it taking full control of AM/NS Calvert, its joint-venture sheet mill in Alabama.

“Look, I’m not going to comment on the specific provisions of our joint venture,” ArcelorMittal CEO Aditya Mittal said.

“But typically, in such situations, when there is a selling partner, they sell it to the other partner in the joint venture, right. So I could imagine such a situation would develop,” Mittal added.

He made the comments on a conference call with analysts following the release of ArcelorMittal’s fourth-quarter 2023 earnings report.

AM/NS Calvert is a joint venture between ArcelorMittal, the AM in the mill’s name, and Nippon Steel, the NS. Nippon Steel plans to acquire U.S. Steel for more than $14 billion in a deal the two companies announced in December.

ArcelorMittal has been reported to be among the companies, including a vocal Cleveland-Cliffs, that had expressed interest in buying U.S. Steel.

Mittal did not confirm whether his company was among the final bidders. “I’m not commenting on M&A. … We have not commented in the past, and we won’t be commenting now,” he said.

But Mittal stressed that Calvert remained key to ArcelorMittal’s growth plans in North America. He described North America as “core” to the company several times on the call. And he also noted that North America, including the company’s mining operations in Canada, accounted for 40% of ArcelorMittal’s earnings before interest, taxes, depreciation, and amortization (ebitda).

“Suffice it to say, we are committed to our business in North America. We have a very strong platform, and we intend to build on that,” he said.

Case in point: ArcelorMittal remains on track to start a first EAF at Calvert by the end of 2024. “And we’re progressing on plans on setting up a second EAF,” Mittal said.

Each EAF would have capacity of 1.65 million short tons (st) per year. That melt capacity would allow Calvert to melt and cast slabs onsite instead of re-rolling slabs imported from abroad or purchased from domestic competitors.

ArcelorMittal in addition plans to double capacity at its hot-briquetted iron (HBI) plant in Gregory, Texas, which Mittal said was “outperforming our expectations.”

Some of that HBI will go to Calvert as the EAFs there start up. And the company would still have “quite a significant amount” of HBI to spare, Mittal said. “We can dial up the capacity and … bring it to Europe if that is what the market is demanding,” he added.

Recall that Austrian steelmaker Voestalpine built the Texas HBI plant. ArcelorMittal then bought an 80% stake in the facility in 2022.

Voestalpine built the HBI facility near a deep-water port in Texas in part because of lower energy costs in the US. The location also allowed it to ship the raw material back to its mills in Donawitz and Linz, Austria.

Michael Cowden

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