Liberty Steel will increase a sustainability surcharge across its UK businesses today to help offset higher energy and carbon costs, a source close to the company told Argus.
Liberty is the last in a line of companies to implement surcharges in response to higher energy costs. ArcelorMittal, British Steel, Celsa and others have already implemented surcharges in the UK/EU.
The charge, which has not been communicated to the market yet, will vary depending on product and production route — £120/t for hot-rolled coil from Newport and £120/t for commodities grades produced at the Rotherham electric arc furnace (EAF), and higher for remelt grades.
The company is restarting its Rotherham EAF later this month with £50mn of shareholder funds injected into the site, it said in a release late on 10 October. Coupled with revenue from sales, workers hope that the money will sustain production for six months. A new separate corporate entity, Liberty Capital, will allocate the funds to the UK business. Liberty said the "provision of funding will set the platform to refinance LSUK operations in full".
It intends to reach 50,000 t/month of production at the EAF as soon as possible. Longer term, Liberty plans to expand Rotherham's capacity to 2mn t/yr, with the introduction of new products.
Liberty said late on 10 October that it has agreed a debt restructuring with Credit Suisse Asset Management for its Liberty Primary Metals Australia (LPMA) business. It will make a "substantial upfront payment" to Credit Suisse and Greensill Bank, and pay the remaining balance in instalments until June 2023. Liberty said "continued strength" in steel and coking coal markets has helped offset the recent correction in iron ore prices. LPMA comprises Whyalla steelmaking operations, as well as 12mn t/yr of iron ore mining and the Tahmoor coking coal mine.
