CSP is a world-class operation, producing high-quality slab at a globally competitive cost. CSP’s state-of-the-art steel facility in the state of Ceará in northeast Brazil was commissioned in 2016 and produced its first slabs in June of that year. It operates a three million tonne capacity blast furnace and has access via conveyors to the Port of Pecém, a large scale, deep water port located 10 kilometers from the plant. CSP operates within Brazil’s first Export Processing Zone, and benefits from various tax incentives including a low corporate income tax rate.
The acquisition brings several strategic benefits to ArcelorMittal, including the potential to:
- Expand the Company’s position in the high-growth Brazilian steel industry.
- Capitalise on the significant planned third-party investment to form a clean electricity and green hydrogen hub in Pecém.
- Add 3 million tonnes of high-quality and cost-competitive slab capacity, with the potential to supply slab intra-group or to sell into North and South America.
- Allow for further expansions by the Company, such as the option to add primary steelmaking capacity (including direct reduced iron) and rolling and finishing capacity.
- Capture over $50 million of identified synergies, including SG&A, procurement and process optimisation.
The state of Ceará has ambitions to develop a low-cost green hydrogen hub. The Pecém Green Hydrogen Hub, a partnership between the Pecém Complex and Linde, a leading global industrial gases and engineering company, is a large-scale green hydrogen project at the Port of Pecém which is targeting to produce up to 5GW of renewable energy and 900 kt/y of green hydrogen in a series of phases. The first phase, which the partnership currently expects to be completed over the course of the next five years, targets the construction of 100-150MW of renewable energy capacity.
Commenting, ArcelorMittal CEO Aditya Mittal said:
“In CSP, we are acquiring a modern, efficient, established and profitable business which further enhances our position in Brazil and adds immediate value to ArcelorMittal. There is significant potential to decarbonise the asset given the state of Ceará’s ambition to develop a low-cost green hydrogen hub and the huge potential the region holds for solar and wind power generation.
“CSP produces high-quality slabs and is cost competitive, ensuring its products are competitive domestically and for export. In the short-term we will continue to supply CSP’s existing customer base in North and South America. However, what makes this acquisition so exciting is the medium to long-term potential and options it presents. As we continue to develop the downstream capabilities of our NAFTA and Brazilian businesses over the medium-term, we have the option for CSP to become an important intra-group slab supplier. Over the longer-term there is also the option to significantly increase its slab capacity and add rolling and finishing capabilities on a low-carbon emissions basis.”