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ArcelorMittal warns its key division may quit UK due to government’s crucial planning decision: Report
KV Prasad Jun 13, 2022, 06:35 AM IST (Published)
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Summary
Quoting a letter from ArcelorMittal addressed to Michael Gove, the Secretary for Levelling Up, Financial Times reported that the steel producer has warned that allowing the closure and redevelopment of part of Chatham Docks would harm the British economy and key industries.
ArcelorMittal, the world’s second-largest steel company, has reportedly cautioned the British government that a planning decision expected this week could result in a crucial division exiting the United Kingdom, media reports suggested on Monday.
Quoting a letter from ArcelorMittal addressed to Michael Gove, the Secretary for Levelling Up, Financial Times reported that the steel producer has warned that allowing the closure and redevelopment of part of Chatham Docks would harm the British economy and key industries.
In the letter, Matthew Brooks, head of ArcelorMittal’s construction solutions division in the UK, urged Gove to promptly authorise a thorough government review of the redevelopment plans before Medway Council’s decision on Wednesday, May 8.
Brooks emphasised the urgency, stating that it would be impossible to call in the application after Wednesday.
He cautioned that if the proposals were approved, ArcelorMittal would reluctantly have to exit Chatham Docks and likely cease operations in Britain due to the absence of suitable alternative locations.
“This would have a significant impact on Britain’s manufacturing and construction industries, delay countless critical national infrastructure projects, come at a significant cost to the economy, and leave Britain vulnerable and exposed to the volatility of international supply chain shocks,” the report mentioned citing the letter.
On Thursday, ArcelorMittal expressed its anticipation for a 3-4% growth in global steel demand excluding China for the current year, alongside reporting first-quarter earnings that surpassed analyst forecasts.
The steel sector has been grappling with subdued construction activity in Europe and challenges in China’s real estate segment, despite being the world’s leading consumer and producer of steel. In the US, demand has been affected by interest rate increases.
The Luxembourg-headquartered firm announced that its first-quarter core profit (EBITDA) reached $1.96 billion, surpassing the average forecast of $1.81 billion in a company poll, yet it remained lower than the previous year’s figure.
Profit growth during the quarter was mainly propelled by enhanced performances in North America, Brazil, Europe, India, and its joint ventures, although this was mitigated by lower results in the mining segment.
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