(AOF) – Steelmaker ArcelorMittal has announced that it has invested $36 million in Boston Metal. The deal is the company’s largest seed investment to date through the XCarb innovation fund. Launched in March 2021, this fund aims to invest in the best and brightest technologies that have the potential to play a significant role in decarbonizing the steel industry, a process that ArcelorMittal intends to lead.
ArcelorMittal participated in a $120 million Series C financing round conducted by Boston Metal. Other participants in the round include the Microsoft Climate Innovation Fund and SiteGround Capital, which join Boston Metal’s existing shareholder registry, which includes Breakthrough Energy Ventures, major miners Vale, BHP, BMW i Ventures, and several cleantech venture capital funds. .
Founded in 2013, Boston Metal develops and markets a patented Molten Oxide Electrolysis (MOE) platform for the removal of carbon from primary steelmaking. The Department of Energy uses electricity to produce molten steel in a straightforward, one-step process.
AOF – Learn more
the main points
– the world leader in the steel industry in terms of the size of its portfolio, from iron mines to processing plants, created by the merger of the French company Arcelor and the Indian company Mittal Steel in 2007;
– The sales volume is divided into 6 sectors: steel and pipe activity in Europe with 57%, in Brazil 17%, North America and Mexico 16%, in Asia 13%, flat steel 62%, then mines;
– a business model that takes advantage of the Group’s four strengths: decentralized structure, active portfolio management, financial solidity and value chain integration, from mines and supplies to finished products);
– The capital is controlled up to 37.41% by the Mittal family, Aditya Mittal, the son of the founder who took over the management of the group, and Lakshmi Mittal retained the chairmanship of the board of directors consisting of 9 members;
Strong financial position.
challenges
– An innovation strategy based on 12 R&D centers and a portfolio of 724 patent families:
Focus on 6 objectives: maintaining competitiveness, offering specialty steel (excluding transportation), capitalizing the Steligence or S-in Motion platform for the automotive market, standardizing industrial processes, spreading digitalization across Arthur and Dahiell platforms and external growth in the digital economy,
– In the service of environmental protection: experience in product cycle analysis or LCA, carbon emission reduction in industrial sites (cold electrolysis, partnerships – Institut Bauen und Umwell, SOVAMAT, CIRAIG, etc.),
– two digital laboratories in France dedicated to digital research (big data, quality and maintenance),
The SI initiative is open to researchers on sustainable development;
A proactive environmental strategy:
– 25% reduction in carbon emissions – 35% in Europe – by 2030, through €10 billion in investments, and full neutrality in Europe by 2050 via the Xcarb green steel supply programme,
– New initiatives on Canadian sites with an investment of CAD 2 billion;
– Indirect earnings from industrial investments, expected to reach $4.5 billion in 2022, compared to $3 billion in 2021 and from a three-year cost savings plan of $1.5 billion;
– Progress of industrial projects in India, Liberia, Mexico and Brazil.
challenges
– Impact of the Russian-Ukrainian conflict: slow resumption of activities in Ukraine after they were suspended in February-March and relative insensitivity to rising gas prices, with 80% of sites recycling used gas;
– the continuing imbalance in logistics and supplies but the beneficial effect of inflation in the prices of raw materials and steel sold;
– Deployment of solutions to capture carbon dioxide emitted from blast furnaces;
– After a good start in the first quarter of 2022 with the aim of increasing steel sales by 3%;
– $0.38 dividend and common stock buyback programs (€2 billion in 2022).
An environmental shift drives metal prices
The environmental shift drives demand and raises prices. And so lithium prices jumped 100% last year, helped by electric vehicle sales. Needs for metals such as aluminum, copper, graphite and nickel should rise by 2050. The war in Ukraine has fueled the price hike because Russia is a major producer of metallic raw materials, particularly aluminium, palladium, nickel and titanium. The International Energy Agency (IEA) recently warned of the risk of deficiencies in many minerals essential to the energy transition. Europe mobilized on strategic minerals in order to consolidate its sovereignty.