SSAB Makes Billion Euro Investment in Fossil-Free Steel in Northern Sweden

SSAB’s Board of Directors has announced today their decision to advance to the next phase of SSAB's transition by constructing a cutting-edge fossil-free mini-mill in Luleå, Sweden. Upon completion, SSAB will discontinue its current blast furnace-based production system, resulting in a 7% reduction in Sweden's CO2 emissions, in addition to the 3% decrease achieved through the conversion of the Oxelösund mill.

The new mill in Luleå will boast a capacity of 2.5 million tons per year and will comprise two electric arc furnaces, advanced secondary metallurgy facilities, a direct strip rolling mill for the production of SSAB's specialty products, and a cold rolling complex aimed at catering to the mobility segment by offering a wider range of premium products. This state-of-the-art facility will be supplied with a blend of fossil-free sponge iron sourced from the Hybrit demonstration plant in Gällivare and recycled scrap.

"The transformation of Luleå marks a significant milestone in our journey towards fossil-free steel production. By eliminating 7% of Sweden's carbon dioxide emissions, we are strengthening our competitive edge and securing jobs through the most cost-effective and sustainable strip production in Europe," says Martin Lindqvist, President and CEO of SSAB.

The total investment in the mini-mill is estimated at EUR 4.5 billion, including contingencies. By investing in new technologies, SSAB aims to avoid approximately EUR 2 billion in investments that would otherwise be required for existing plant and equipment over the next decade. The plan is to finance the investment using internal cash flows while adhering to SSAB's financial targets.

This investment is projected to generate significant value creation. The annual enhancement in EBITDA is projected to surpass SEK 5 billion compared to the present system, based on current commodity forecasts. The new mini-mill will enjoy a superior cost position, with reduced fixed costs, enhanced efficiency, shorter lead times, and eliminated CO2 costs. The mill's design includes a production increase of 0.5 million tons per year and an enhancement in product quality, with a 1 million ton per year increase in special and premium steel grades.

The startup of the new mill is slated for the end of 2028, with full capacity expected one year later. Environmental permits are anticipated to be obtained by the end of 2024. This investment represents a crucial step in SSAB's strategy to establish a leading position in emission-free special and premium steels. SSAB has already forged 55 partnerships with prominent customers for their fossil-free and zero-emission steels.

In 2023, SSAB made the decision to transition the steel mill in Oxelösund to fossil-free production, and the project is progressing as planned. The decision to proceed with Luleå as the next step is driven by financial considerations, as well as the fact that the equipment at the Raahe mill is more advanced and in better condition. A transformation for Raahe, Finland, is planned as the third step, with the project's timing contingent on SSAB's financing and execution capacity, as well as the insights gained from the Luleå project.

"In collaboration with our partner LKAB, we pledge to eradicate CO2 emissions throughout our value chain and set a standard for fossil-free technology in the future." In doing so, we are also securing Nordic industrial competitiveness for the coming decades and supporting the thousands of customers reliant on quality steel from our value chain," concludes Martin Lindqvist.