Author: Annalisa Villa
Metallurgical Coal | Iron | Steel
Two EAFs and One Blast Furnace Planned
DRI/HBI and Scrap to Serve as Key EAF Inputs
Global investment firm Flacks Group plans to develop an annual steelmaking capacity of 6 million metric tons at Italy’s national steel producer Acciaierie d’Italia (ADI), using two electric arc furnaces (EAFs) alongside one blast furnace, Chairman Michael Flacks told S&P Global Energy on January 6.
Flacks Group, which specializes in acquiring and restructuring medium- to large-sized distressed industrial assets, entered into exclusive negotiations last week with the special commissioners overseeing the sale of ADI, formerly known as Ilva. Flacks confirmed the move to Platts, corroborating reports from Italian media.
“At the Taranto site, we are planning production capacity of 2 million tons per year for each electric arc furnace, for a total of 4 million tons annually via EAFs, complemented by one blast furnace capable of producing approximately 2 million tons per year,” Flacks said.
According to Flacks, retaining a blast furnace is essential to ensure the production of high-grade steel products. “Certain deep-drawing steel grades for the automotive sector, and most importantly high-strength steels used in energy applications, gas pipelines, and shipbuilding, are difficult to produce using EAF technology alone,” he explained.
He added that fully utilizing the capabilities of hot strip mill No. 2, as well as downstream heavy plate and pipe production lines, requires keeping one blast furnace in operation. “This approach also diversifies raw material risk and has strategic importance for maintaining steel production as part of critical national infrastructure,” he said.
The primary feedstock for the EAFs will consist of direct-reduced iron (DRI) and hot-briquetted iron (HBI), supplemented by scrap, although sourcing decisions have yet to be finalized. Flacks noted that ADI is well positioned logistically to secure DRI/HBI or scrap shipments by sea, given its proximity to the Port of Taranto.
The original development plan evaluated the use of either MIDREX technology (licensed by Kobe Steel) or ENERGIRON HYL technology (developed by Tenova and Danieli). Both processes rely on natural gas for iron ore pellet reduction and are considered hydrogen-ready, allowing for a gradual transition from natural gas to hydrogen.
“In the initial phase, natural gas would remain the primary reducing agent due to its availability,” Flacks said, noting that green hydrogen is not yet accessible in the volumes required and remains a longer-term objective.
“The original plan is extremely ambitious,” he added. “After 2035, it envisions a major shift toward hydrogen-based DRI production, which, when combined with renewable electricity, could reduce CO emissions by 90% to 95% compared with current levels. However, given today’s technological readiness and hydrogen production costs, this target appears highly unrealistic.”
Under the terms currently under discussion, the Italian government would retain a 40% strategic stake in ADI, while Flacks Group would hold an option to acquire an additional 40% stake at a later stage.
Flacks also intends to preserve approximately 8,500 skilled jobs, calling the workforce ADI’s biggest asset.
An ADI spokesperson was not available for comment.
