Industry News

ArcelorMittal and Liberian President George Weah have announced a 25-year commitment to stay in Liberia. Through the deal, the steelmaker will triple its iron ore production in the country and invest an additional $800 million. The steelmaker said it has invested $1.7 billion in the country over the last 15 years.

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ArcelorMittal invests in Liberia

ArcelorMittal logo

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The steel and mining company had initially signed a 25-year agreement with Liberia in 2005. It shipped the first iron ore from its Yekepa mine in 2011.

During the newly signed first phase of expansion, annual production would reach 15 million tons (MT), with the potential of reaching 30 MT a year, ArcelorMittal Executive Chairman Lakshmi Mittal said at the signing ceremony.

ArcelorMittal will provide the government with a total of $65 million from the production of 15 million MT of iron ore in three years. Since the end of a 1989-2003 civil war, the mining and agriculture potential of Liberia has attracted billions of dollars in resource investments. However, the country’s infrastructure remains underdeveloped and the majority of its 5 million people live in poverty.

Going green

Of late, the UK-headquartered ArcelorMittal has been in the global headlines for its determined drive on the “green steel” and clean energy fronts, joining the trend of steelmakers foraying into green hydrogen and increasing the footprint in renewable power generation.

Just last week, Germany pledged to offer funding of $65 million toward of ArcelorMittal’s investment of 110 million euros ($131 million) in a hydrogen plant powered by renewable electricity.

German Environment Minister Svenja Schultze said Berlin would pay 55 million euros — subject to EU approval — toward a new direct reduced iron (DRI) plant. The plant will use green hydrogen to reduce iron ore in a CO2-free steelmaking process.

By 2025, ArcelorMittal Hamburg’s Chief executive Uwe Braun expects his company to produce 100,000 tons of DRI for steelmaking with green hydrogen from the plant.

ArcelorMittal invests in Indian solar power

Elsewhere, in India, ArcelorMittal plans to invest in solar energy in the Indian provinces of Rajasthan & Gujarat.

According to a report by pv magazine, Group Chairman Lakshmi Niwas Mittal met representatives of the local governments in Rajasthan and spoke of setting up a 4.5 GW solar park at an investment of about U.S. $2,586 million (Rs 19,000 crore) in the province. The plant is to be set up by ArcelorMittal arm HPCL-Mittal Energy Limited.

In another meeting with the Gujarat officials, Mittal also expressed his intention of investing about U.S. $6,809 million in Gujarat’s solar energy, wind energy and hydrogen gas production sectors.

ArcelorMittal currently produces DRI using grey hydrogen, which comes from natural gas. In a green hydrogen system, the hydrogen is produced by using renewable energy sources, like wind or solar power, and then run through an electrolyzer.

ArcelorMittal would have achieved its goal of expanding output to 15 MT per year would have been accomplished much earlier, but the Ebola outbreak in 2014 disrupted its expansion plans in Liberia, for which it declared force majeure.

ArcelorMittal said the project will generate more than 2,000 new jobs during the construction phase.

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Before we head into the weekend, let’s take a look back at the week that was and some of the metals storylines here on MetalMiner, including stainless steel consumption’s impact on nickel prices, surging aluminum prices and much more:

stainless steel rods

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Week of Sept. 13-17 (stainless steel drives nickel, aluminum prices rise and more)

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This morning in metals news: U.S. Steel released its third-quarter guidance yesterday; U.S. petroleum exports just edged out imports in the first half of the year; and, lastly, unemployment rates fell in 15 U.S. states in August.

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U.S. Steel releases Q3 guidance

U.S. Steel logo

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On Thursday, U.S. Steel released its Q3 2021 financial guidance, forecasting EBITDA of $2.0 billion, up from $1.3 billion in the second quarter.

“We expect the third quarter to be a quarter of records for U. S. Steel,” U. S. Steel President and CEO David B. Burritt said. “Supported by strong reliability and quality performance, sustained customer demand, and continued increases in steel selling prices, we expect our Best for All℠ business model to generate record quarterly adjusted EBITDA and EBITDA margins, demonstrating the power of our strategy.”

Burritt added U.S. Steel is bullish that market fundamentals “will support a stronger for longer steel market.”

Higher steel prices into adjusted contracts and spot selling prices, plus strong customer demand, will contribute to record EBITDA in the company’s flat-rolled segment, the guidance report indicated.

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A deal is not a deal until it is done, goes the old adage.

Mining projects are notorious for falling afoul due to presuming agreed terms will be played out as expected.

The Financial Times reports on the conundrum BHP and Rio Tinto face in developing the Oak Flat copper ore body in Arizona.

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Oak Flat copper project faces challenges

mine mining

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Oak Flat, 65 miles east of Phoenix, is home to a giant underground ore body. The ore body holds enough copper to satisfy 25% of U.S. demand for 40 years, the Financial Times reports.

That is a very sizeable asset to the U.S. economy and a strategic resource if ever there was one in a world of increasingly strident resource nationalism.

But Resolution Copper, a joint venture between Rio and BHP that wants to mine it, has been facing opposition from the San Carlos Apache Tribe, for whom the site is said to have special religious significance.

That is not an unusual situation in democracies the world over, with indigenous tribes whose rights are respected and enshrined in law.

Nor, it must be said, does Rio have a great track record here.

Just last year, it wilfully destroyed a 46,000-year-old sacred Aboriginal site in Australia to make way for a mine extension. For Rio, the action became a public relations disaster (not to mention an archaeological disaster). It is something that will takes years for it to overcome.

However, in this instance, the joint venture Resolution Copper, 55% owned by Rio and 45% by BHP, had an agreement signed in 2014 that would grant the miners right to develop the resource. That deal includes some 2,400 acres of national forest land including Oak Flat, in exchange for 5,400 acres of land owned elsewhere.

Land swap

The problem is, in part, that the recipients of this land swap is not the tribes, but Uncle Sam.

According to National Geographic, early this year the government receives the 5,400 acres considered of equal monetary value. However, there appears to have been no account of the area’s historical significance to local people. That land swap was contingent, the Financial Times reports, on the U.S. Forest Service completing a Final Environmental Impact Study (FEIS), which would assess the potential effects of the mine development. Again, though, it doesn’t appear to have considered the loss of the tribal lands.

The FEIS released the report and gave its approval in the final days of the Trump presidency. That approval, however, now been rescinded by the Biden administration. As such, the development is now in jeopardy as the government considers the concerns raised by tribes and the public.

Tribal, public opposition

Both tribal and public opposition remains widespread.

The underground mine is some 7,000 feet below the surface. The gradual removal of the ore body over 40 years — although mined via shafts underground, not open cast — would still result in a two-mile wide crater and the loss of water resources in the area, according to ABC15 news, As such, it could potentially devastate the local environment, opponents say.

Unfortunately, ore bodies can only be mined where they exist. There is only so much high-grade copper in the world. Compromises often must be made. Whether a solution will be found in the case of the Oak Flat copper project that will allow the massive ore body’s eventual exploitation remains to be seen.

Rio and BHP have invested $2 billion into survey work so far. They may have to invest much more before the project sees the light of day.

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This morning in metals news: U.S. import prices declined by 0.4% in August; the Energy Information Administration surveyed the disruption to electricity customers as a result of Hurricane Ida; and, lastly, the European Steel Association commented on the European Union’s proposed Green Deal.

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US import prices fall

imports

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Running against the recent trend, U.S. import prices fell by 0.4%, the Bureau of Labor Statistics reported.

Import prices had jumped by 0.4% in July and 1.1% in June.

“The August downturn was led by lower fuel and nonfuel prices,” the BLS reported. “In contrast, prices for U.S. exports advanced 0.4 percent in August, after increasing 1.1 percent in July.”

Hurricane Ida impact on electricity customers

After Hurricane Ida made landfall in New Orleans in late August, many were left without power.

According to the Energy Information Administration, the storm caused at least 1.2 million electricity customers to lose power. The outages spread out over eight states.

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This morning in metals news: the U.S. steel capacity utilization rate rose to 85.3% for the week ending Sept. 11; Norsk Hydro signed an energy deal; and, lastly, aluminum prices have continued to skyrocket.

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Steel capacity utilization rises to 85.3%

steelmaking in an EAF

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The U.S. steel capacity utilization rate picked up to 85.3% for the week ending Sept. 11, the American Iron and Steel Institute (AISI) reported.

U.S. steel production during the week totaled 1.88 million net tons. Production for the week rose by 0.9% from the previous week. Furthermore, output jumped by 22.4% year over year.

For the year to date, production totaled 65.8 million net tons at a capacity utilization rate of 80.8%.

Hydro signs natural gas deal

Oslo-based Norsk Hydro said it had signed a 15-year deal for the supply of liquefied natural gas (LNG) to its Alunorte alumina refinery in Brazil.

Hydro signed the supply deal with New Fortress Energy.

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Germany’s federal environment minister has pledged €55 million ($65 million) towards ArcelorMittal Hamburg’s planned construction of a demonstrator directed reduced iron (DRI) plant, which will eventually use green hydrogen, the Luxembourg-headquartered group stated.

Svenja Schulze pledged the government’s support Sept. 7 while visiting the Hamburg plant, ArcelorMittal noted.

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Germany to offer half of funding for new ArcelorMittal plant

ArcelorMittal sign in Ontario

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That amount represents half of the projected €110 million ($130 million) cost for the plant, ArcelorMittal said. However, funding is contingent on European Commission approval.

A spokesman for the group declined to say when the European Commission would give its approval. The spokesman expressed hope that approval would come “soon.”

The demonstrator plant will have a DRI capacity of 100,000 metric tons per year and is due to come on stream by 2025. The spokesman noted that it would at first use grey hydrogen to produce DRI, rather than green.

“Once available in sufficient volumes and at an affordable price, green hydrogen – made from the electrolysis of water using renewable energy – will be used,” ArcelorMittal stated in its Sept. 7 announcement.

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This morning in metals news: global aluminum production picked up in July; the WTI crude price continues to hover around $70 per barrel; and, lastly, the Producer Price Index for final demand increased by 0.7% in August.

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Aluminum production increases in July

aluminum ingot

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Global aluminum production totaled 5.74 million metric tons in July, the International Aluminum Institute reported.

The total marked an increase from 5.52 million metric tons in July 2020. Furthermore, the total increased from 5.56 million tons in June 2021.

China’s estimated production rose to 3.34 million metric tons in July 2021. The total marked an increase from 3.24 million tons in June 2021.

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Before we head into the weekend, let’s take a look back at the week’s news and some of the metals storylines here on MetalMiner: Aluminum prices reach 10-year high while a coup in Guinea threatens to disrupt global bauxite supply, China-Australia iron ore trade surges ahead despite ongoing tensions; and see MetalMiner’s analyst-driven Monthly Metals Index updates for aluminum, raw steels, copper, stainless.

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Each month, MetalMiner hosts a webinar on a specific metals topic. Explore the upcoming webinars and sign up for each on the MetalMiner Events page.

News for the Week of Sept. 7-10

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crude oil

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This morning in metals news: In a bid to aid domestic refiners currently limited by steep energy costs, China announced plans to auction crude oil from its strategic reserves. In other news, Shell declares force majeure as Hurricane Ida’s fallout continues. Also in the news, July steel shipments show 37% year over year rise.

Cut-to-length adders. Width and gauge adders. Coatings. Feel confident in knowing what you should be paying for metal with MetalMiner should-cost models.

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