Metinvest plans to build a green steel plant in Piombino – CEO

The steel plant will use iron ore raw materials from Ukraine

Metinvest Group has committed to building a new green steel plant in Piombino as part of a program agreement with the Italian Minister of Economic Development. The company’s CEO Yuriy Ryzhenkov said this in an interview with La Repubblica, one of the largest Italian newspapers.

«This is the result of the cooperation of many institutions, including regional and municipal ones. We hope to finalise the agreement within the next three to four months and to have a precise action plan. Italy imports around 6 million tonnes of products, and with the production capacity we plan to launch, we will be able to significantly reduce this deficit,» he said.

The Piombino plant will be one of the most technologically advanced and environmentally friendly enterprises. It will serve as a pilot project for Metinvest’s future investments in Ukraine when post-war reconstruction begins.

The company expects that the future Italian plant will produce steel using iron ore from Ukraine, which will increase the utilization of domestic mining and processing plants.

«We planned to build a plant in Italy long before the invasion. The idea was to use semi-finished products from Azovstal for further processing in Italy. Now we know that Azovstal is gone. But we have iron ore facilities in Ukraine with high-quality ore that can be used to make DRI/HBI (direct reduced iron – ed.). So now the idea is to build a plant that will use iron ore from Ukraine to produce steel in Italy.,» explains the CEO of the company.

Metinvest expects to start construction of the plant in late 2024 if the program agreement is finalized by the middle of this year. It will take 2-3 years, and production is expected to start in 2027.

As a reminder, in 2023, Ukraine reduced iron ore exports by 26% compared to 2022, to 17.75 million tons. Exports of raw materials decreased by 60% compared to pre-war 2021. Revenues of Ukrainian mining and metals companies from iron ore exports decreased by 39.4% y/y – to $1.77 billion.

Domestic iron ore mines plan to increase the iron content of their commodity raw materials. The current global metallurgy development vector, which involves the transition to green steel production, creates demand for high-quality iron ore concentrate. This requires additional efforts from mining and processing plants, in particular in the transition from the production of concentrates with an iron content of 64-68% to the production of concentrates with an iron content of 70-71%.