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Salzgitter to downsize and continue operating HKM steel plant

German steel producer Salzgitter has outlined a conditional strategy to keep operations running at the Hüttenwerke Krupp Mannesmann (HKM) steel plant in Duisburg, even as its joint venture partners move toward an exit. However, the company made clear that continued operations would require a substantial downsizing of the facility.

Salzgitter to downsize and continue operating HKM steel plant

HKM is currently owned by thyssenkrupp Steel with a 50% stake, Salzgitter with 30%, and French pipe producer Vallourec holding the remaining 20%. Both thyssenkrupp and Vallourec have signaled their intention to withdraw from the venture, prompting Salzgitter to assess scenarios under which the plant could remain active.

According to Salzgitter, a continuation of operations would likely involve a sharp reduction in capacity—from the current level of around 4.2 million tonnes per year to roughly 2–2.5 million tonnes. The restructuring plan under consideration also includes replacing blast furnace production with electric arc furnace technology and significantly reducing the workforce, potentially from about 3,000 employees to nearly 1,000.

The company stressed that any takeover of the remaining shares would depend on clear preconditions. These include cost-sharing by the exiting shareholders for restructuring measures and layoffs, as well as firm steel procurement commitments from thyssenkrupp covering the next two to three years.

Adding to the uncertainty surrounding the plant’s future are ongoing arbitration proceedings between Salzgitter and thyssenkrupp. These disputes relate to financial responsibilities tied to restructuring and post-withdrawal liabilities, with outcomes that could materially influence the feasibility of maintaining HKM operations.

While Salzgitter has not ruled out a future for the Duisburg facility, the company’s statements underline that any continuation would be fundamentally different in scale and structure from HKM’s current configuration.

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