Austria's voestalpine Signs MoU with Romania as Part of Plans for 5.0 Bln Euro Steel Mill in Black Sea Region

There are two important conditions before taking the final decision on the plant location, voestalpine’s general director, Wolfgang Eder, told a news conference after the signing ceremony in Bucharest.

The company needs 6 square kilometres of land for the project. Its decision also depends on the carbon dioxide (CO2) emissions caps that will be set for 2013 in the European Union, he said. The CO2 emissions quota will be a very important factor in deciding whether to build the plant in the EU or elsewhere, Eder said.

The EU trading scheme sets a limit on total CO2 emissions for each industrial sector and requires energy-intensive industries to have a carbon credit for every tonne of emissions. If emissions are below the cap, companies can sell their surplus, if emissions exceed the cap, companies are required to buy credits.

voestalpine has already concluded similar agreements with Ukraine and Bulgaria. The group said earlier it is also considering a site in Turkey for its biggest ever investment. The company has said it will take the final decision on the location of the new production unit by the end of this year.

The mill, expected to be completed by the end of 2012, will have a planned capacity of 5.5 million tonnes of steel per year and will create some 7,000 jobs, the government's press office said in a statement later in the day.

voestalpine Group (www.voestalpine.com ) has production and sale units in 60 countries.

The group's revenue rose by 50.9% to 10.4 billion euro in the 2007/2008 fiscal year that ended on March 31 and its profit for the period rose 31.2% to 1.0 billion euro. The group reported a record crude steel production of 7.6 million tonnes, up from 6.7 million tonnes in the previous fiscal year.

($ = 0.7119 euro)