SSAB AB (SSAAF.PK), a Swedish-American steel company, said on Tuesday that it is building a fossil-free mini-mill in Lulea, Sweden with a total estimated investment of 4.5 billion euros, including contingencies to cut emissions.
Martin Lindqvist, CEO of SSAB, said: "The transformation of Lulea is a major step on our journey to fossil-free steel production. We will remove 7% of Sweden's carbon dioxide emissions, strengthen our competitive position and safeguard jobs with the most cost-effective and sustainable strip production in Europe."
Upon the completion of the construction, which is funded by the cash on hand, SSAB will close the current blast furnace-based production system.
The new Lulea mill will have a capacity of 2.5 million tons of steel per year and consist of two electric arc furnaces, advanced secondary metallurgy, a direct strip rolling mill to produce specialty products.
The new mill will be supplied with a mix of fossil free sponge iron from the Hybrit demonstration plant in Gallivare and recycled scrap.
By investing in new technologies, SSAB is avoiding investments otherwise required in existing plant and equipment of 2 billion euros during the next 10 years.
Compared to the current system the yearly EBITDA improvement is estimated to be over SEK 5 billion a year.
The new mini-mill will have a better cost position with lower fixed costs, higher efficiency, shorter lead times, and eliminated CO2 costs.
The mini-mill design includes a production increase of 0.5 million tons a year, a mix improvement with 1 million ton per year rise of special and premium steel grades.
The new mini-mill is expected to start at the end of 2028 with full capacity a year later.
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