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License Cia Siderurgica do Atlantico: to extend or not extend?

25 September 2016

History is replete with hasty decisions. Some first come to life, then just as rapidly played back. One of those stories happened in the Brazilian state of Rio de Janeiro. The Tribunal of justice in late September issued a ban on the renewal of the operating license. It was a question of metallurgical production, Cia Siderurgica do Atlantico. The works belongs to the Corporation ThyssenKrupp, Germany. The decision on non-issuance of a license threatened plant shutdown from October 2016. The plant is in operation took place in 2010. Since that period the company operates on the basis of temporary licenses. The validity of each of them was 90 days. Such restricted period has its own explanation.

The main problem of the plant — high level of pollution of the surrounding world. The complaint then the matter coming from residents of the city of Santa Cruz. It is located next to Rio-de-Janeiro — and, therefore, close to and from the plant. The main leitmotif of complaints of toxic emissions, dusty atmosphere, deterioration of the quality of the local water. The plant was fined repeatedly. The decision of the court, his work stayed several times. A new trial began in late July 2016. And if the company plans to obtain another license for the enterprise, will have to take action. In particular, we are talking about environmental studies. The next obvious step would be to improve sewage treatment plants.

The project of building of the enterprise started in Brazil in 2008. The plant is designed for production of 5 million tonnes of slabs annually. Partner of ThyssenKrupp in the project was a Brazilian Corporation Vale. The construction cost partners to 5.3 billion EURO. But the project despite the funds spent on it was not too successful. After its launch it turned out that under new conditions the company is not adapted. In the end, the business model has become a source of profits, and losses. In the middle of this year Vale gave ThyssenKrupp 27% of its shares at nominal value. Attempts to sell the company without success.

Maybe the shutdown would be the best solution. However, put a ban on the issuance of the license was withdrawn. The Tribunal of justice, which imposed him his own and canceled the next day. The fact that the Corporation is the owner complied with the conditions necessary for the issuance of a permanent license. The Brazilian Agency INEA for the protection of the environment ready to confirm the possibility of licensing. And give it — the main thing is to complete the legal procedures.

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