ArcelorMittal invests to expand production of charcoal

ArcelorMittal Bio-energy is responsible for the production and marketing of the renewable commodities such as charcoal, wood, seeds and seedlings from the formation of Eucalyptus forests. From 2011-2016 the firm plans to invest $390 million with the aim to expand the production of charcoal from 2.5 million cubic metres up to 5.2 million m³ by 2016.

For next year, investments will be made with their own resources, resulting in $90 million and directed to various activities such as forest plantations, purchase of machinery and the construction of infrastructure for the production of steel inputs.

Elesier Lima Gonçalves, the company’s president stressed that the prospect is that the annual growth in the production of charcoal is 25-30%. 2.3 million m³ are produced from the two blast furnaces and an electric oven that is currently available. By 2016, it is believed that two more blast furnaces will go into operation.

New laws in Brazil dictate that blast furnaces must be stocked with charcoal instead of coking coal. The changes should be completed by June 2011.

The company started on July 2010 through the merger of the assets of ArcelorMittal and ArcelorMittal Jequitinhonha & Forests. Together they have a forest estate of 282,000 hectares with 171,000 hectares of that are planted with renewable Eucalyptus trees.

There are plans to sell carbon credits and to reduce their dependency on coking coal as using charcoal is more attractive for them financially. ArcelorMittal also sells seedlings of Eucalyptus with the capacity to produce 42 million seedlings per year. This year alone ArcelorMittal must consume 10 million seedlings where another 10 million would be sold.