Sep. 28, 2022

Nippon Steel Corporation

ArcelorMittal Nippon Steel India Limited (AM/NS India), a joint venture of Nippon Steel Corporation (Nippon Steel) and ArcelorMittal (AM), has decided to implement the following measures to strengthen its steel making business base:

1. New construction and capacity expansion of upstream and hot-rolling facilities at the Hazira steel mill
The steel market in India is expected to grow steadily due to economic growth and population growth, while the domestic production of steel, including upstream processes, is progressing. The Government of India has firmly maintained its support policy for demand generation, including policies for infrastructure development and the promotion of manufacturing industries, and has also set an aggressive target for expansion of India’s steel production capacity. AM/NS India is currently the fifth largest producer of crude steel in India but will expand its production capacity by investing in new construction and capacity expansion of upstream and hot-rolling facilities through utilization of the unused land in the existing Hazira steel mill, with the aim of meeting the growing demand in the India’s market and securing its market presence. In addition, this construction and expansion of the facilities will also serve to enable future transfer of carbon-neutral technology, which is under development by the parent companies Nippon Steel and AM.

[Outline of the new facility]
Ironmaking process: Two blast furnaces, two sintering facilities, three coke furnaces, etc.
Steelmaking process: Three basic oxygen furnaces, two continuous casting machines, etc.
Hot process: One hot strip mill, etc.
Increase in capacity: approximately 6 million tons/year in crude steel production capacity
(Crude steel production capacity of Hazira steel mill after the expansion: approximately 15 million tons/year)
Start of operation:
 Phase I: Second half of 2025 (No. 2 blast furnace and related facilities, new steelmaking and new hot-rolling facilities)
 Phase II: First half of 2026 (No. 3 blast furnace and related facilities)
Investment amount: Approximately INR 410 billion (approx. 730 billion yen)

2. Acquisition of port, electric power and other infrastructure companies, assets, etc. owned by the Essar Group
Nippon Steel and AM jointly established AM/NS India in December 2019 by acquiring Essar Steel India Limited (ESIL) of the Essar Group, under the Insolvency and Bankruptcy Code of India. Since the port, electric power and other infrastructure companies and assets were operated as separate companies and businesses from ESIL, they were not included in the acquisition, and continued to be owned by the Essar Group.

As the infrastructure, including ports and electric power operation, is an integral part of AM/NS India's steelmaking business operation, on August 26 we agreed with the Essar Group to acquire these facilities . By acquiring these facilities, AM/NS India will further stabilize and strengthen its operating production and supply chain, and secure a system that meets infrastructure requirements such as for ports and electricity after the expansion of production capacity at the Hazira steel mill.

[Outline of major infrastructure companies and assets to be acquired]
(1) Port related
1) Essar Bulk Terminal Ltd. (Hazira, Gujarat, western India)
Handles almost all the incoming shipment of raw materials and and outgoing shipment of products at the Hazira steel mill (cargo handling capacity: 25 million tons/year)

2) Essar Bulk Terminal Paradip Ltd. (Paradip, Odisha, eastern India)
Handling of pellet transport and cargo at the Pellet Plant in Paradip (cargo handling capacity: 12 million tons/year)

3) Essar Vizag Terminals Ltd. (Visakhapatnam, Andhra Pradesh, eastern India)
Handling of pellet transport and cargo at the Pellet Plant in Visakhapatnam (Vizag) (Cargo handling capacity: 16 million tons/year)

(2) Power related
1) Essar Power Hazira Ltd. (Hazira, Gujarat, western India)
Power generation company on the premises of the Hazira steel mill (power generation capacity: 270 MW)

2) Assets of Essar Power Ltd. (Hazira, Gujarat, western India)
Power generation assets on the premises of the Hazira steel mill (power generation capacity: 515 MW)

3) A part of business of Essar Power Transmission Company Ltd. (Hazira, Gujarat, western India)
Power transmission business for electricity outsourced by the Hazira steel mill (transmission line: 100 km)

(3) Amount of acquisition
Approximately US$2.4 billion (approximately 340 billion yen)

[Overview of AM/NS India]
Business:   Manufacturing and sales of steel products and pellets through the integrated upstream process
Head office location:     Hazira, Gujarat, India
Capital:      INR 92.2 billion
Investment structure:  Nippon Steel 40.0%, AM 60.0% (consolidated as equity-method affiliate by both Nippon Steel and AM)
CEO:          Dilip Oommen
Employees: 4,567 (December 2021)
Production and sales: Crude steel production of 7.39 million tons/year; steel product sales of 6.91 million tons/year in 2021
Steel mills:    
    Hazira integrated steel mill (Hazira, Gujarat, western India)
    Pune downstream process manufacturing base (Pune, Maharashtra, western India)
    Paradip pellet plant (Paradip, Odisha, eastern India)
    Vizag pellet plant (Visakhapatnam, Andhra Pradesh, eastern India)


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