AMNS Luxembourg, Japan banks enter $5bn steel loan pact

AMNS Luxembourg, the parent company of ArcelorMittal Nippon Steel (AM/NS) India, has entered into a $5bn loan agreement with Japanese banks on 30 March to finance expansion at the Hazira plant in Gujarat.

The banks involved in the agreement are the Japan Bank for International Co-operation (JBIC), MUFG Bank, Sumitomo Mitsui Banking, Sumitomo Mitsui Trust Bank, Mizuho Bank and Mizuho Bank Europe.

"The proceeds obtained through the JBIC co-financing loan will be used to finance the expansion of AM/NS India's annual steelmaking capacity at its Hazira plant from 9 million tonnes to 15 million tonnes," ArcelorMittal said in a release.

The fund will also be used towards the development of downstream rolling and finishing facilities that will produce value-added steels for sectors including defence, automotive and infrastructure, it said.

AM/NS India started the expansion project of its Hazira plant in Gujarat in October 2022. The company aims to build two blast furnaces, two sintering facilities and three coke furnaces for the ironmaking process at Hazira, and plans to make three basic oxygen furnaces, two continuous casting machines for steelmaking and one hot strip mill by utilising the unused land at the plant.

"The steel market in India is expected to grow steadily with economic and population growth, while the domestic production of steel, including upstream processes, is progressing under the government of India's 'Make in India' policy," Nippon Steel said in a separate release.

Nippon Steel aims to capture the growing demand in the Indian market and secure its market presence, it said, adding the construction and expansion of the facilities will also serve to enable future transfer of carbon-neutral technology, which is under development by Nippon Steel and ArcelorMittal.

The steelmaker acquired the 1.2mn t/yr Uttam Galva plant that specialises in cold-rolled, colour-coated and galvanised steel processing last year.

AM/NS India's crude steel production fell by 9.6pc on the year to 6.69mn t in calendar 2022, and its sales dropped by 6.4pc on the year to 6.47mn t because of a 15pc export duty imposition by the Indian government.

By Sumita Layek