British-based conglomerate GFG Alliance will invest 1 billion euros in a Romania steel plant, to modernize its emissions-heavy European steel plants and boost production, Reuters news agency reported.
The steel industry is facing over-supply and falling demand, which is expected to be made worse by the impact of the coronavirus.
Investors are worried about climate change when steel is responsible for an estimated 7% of all greenhouse gas emissions, the agency reported.
Some of the money from commodities tycoon Sanjeev Gupta’s GFG will go toward installing electric furnaces, which can reduce emissions by around 60%.
A major advantage of electric arc furnace technology is that it can be easily turned on and off to respond to market conditions.
Neil Barrell, GFG global chief operating officer, told Reuters that the electric-powered mills, which can require less than half as much manpower, will not replace coal-fired furnaces, so no jobs are under threat for now.
He said the investment at Galati would increase production to 4 million tonnes per year over time up from the current 2 million tonnes according to the company website.
GFG acquired the steel mill located in Galati (formerly known as Sidex) in July. It changed its name from AcelorMittal Galati to Liberty Galati.
It has 5,100 employees and 1,700 contractors, and is the biggest private employer in eastern Romania.
GFC will also invest 750 million euros at its Ostrava plant in the Czech Republic, Reuters reported.
GFG which started out as a metals trader, spent billions of dollars buying up often troubled metals manufacturing facilities around the world.
It acquired assets in Romania, the Czech Republic, Italy, Belgium, Luxembourg and North Macedonia after the European Commission approved ArcelorMittal’s purchase of Ilva on condition it sold off some of its works.